It’s 2022 and SAP is poised to fulfill a decades-old dream of building and maintaining a business network. This isn’t just a procurement, logistics, commerce, or any of the other networks that SAP and others have been building and marketing over the years. (Remember SAP Markets, anyone?) The business network that SAP will re-announce next month at SAP Sapphire & ASUG Accelerate Orlando will be the kind of many-to-many network the world has been waiting for—one that’s got something for buyers and sellers, manufacturers and distributors, and managers from a wide range of departments, such as supply chain, finance, logistics, sales, service, and operations. The SAP Business Network will support sustainability, compliance, risk management, trade finance, and advanced customer and employee experiences. And so much more.
Of course, that will be the announced vision. However, realizing a fully operational business network that can do all those things will take some time. This vision comes with some serious barriers, internal and external, and no shortage of basic challenges. For one, there are few buyers with titles like “VP of Business Networks.” Questions also arise about how to best use—legally and ethically—the data that such a network will generate. And, looming large, is the question of how to enable smaller suppliers to see immediate value, and not suddenly find themselves disadvantaged by being forced to swim in a large pond with their much larger competitors.
Time to Mature
Luckily, the development and adoption of the SAP Business Network in its entirety will be a slow-moving train rolling out over the next few years. This is a good thing for a concept that will need time to mature in the minds of SAP customers and partners, as well as within SAP itself.
Nonetheless, the long-term vision is impressive. On the supply side, the Business Network will handle the mega processes that go into sourcing, making, and delivering products. On the demand side, the Business Network promises to support the lead-to-cash mega process for virtually any size company, in any industry. To make this possible, the functionality under the Business Network rubric will include sales, procurement, planning, logistics, fulfillment, manufacturing, service, and finance. Furthermore, it will include contingent labor, supplier management, compliance and risk management, and sustainability. And it aims to all be tuned to the needs of specific industries and geographies.
This means that elements of products such as SAP Ariba, S/4HANA, Customer Experience, SuccessFactors, Integrated Business Planning, and Fieldglass will be there, as will pretty much everything else SAP has to offer a business user. The nascent SAP Logistics and Asset Networks will also be subsumed in the Business Network. You can add the recent Taulia acquisition to the list as well, under the category of capital management and trade finance.
What About Right Now?
So much for a 30,000-foot view of the long-term value. What about the short-term value? What can a company get from SAP Business Network today?
An early quick win will be the increasingly important, and increasingly onerous, requirement for suppliers to self-certify their human rights and environmental regulation compliance. According to Paige Cox, who heads the SAP Business Network effort, it can take literally hundreds of hours for a supplier to fill out the required multi-page questionnaires and provide the necessary certifications. This isn’t just 100 sequential hours either—there can be a fair amount of back and forth in order to cut through all this red tape, and for some companies, this can take many months.
The beauty of SAP Business Network, and any procurement network, is that a supplier need only do this once; afterward, the results can be available to any buyer. More importantly, while these kinds of certifications are tables takes for procurement networks such as Coupa—a favorite among the SAP customers who have no love for Ariba—being part of the SAP Business Network means that a company can tap into the growing list of additional processes that will roll out in the next few years. Some, like the Taulia integration, are on a fast track for 2022, as are risk monitoring, traceability, and assorted supply chain transparency capabilities. This should make the nascent SAP Business Network a good investment for today and tomorrow. Like any good network, the benefits are expected to grow as the features mature.
All About Integration
What’s the catch? SAP has a lot of work to do when integrating all this software to work together. It must ensure that non-SAP tech, such as Coupa, Salesforce, or anything else the customer may have on board, can also work well in an SAP Business Network. SAP must also figure out the Business Network business model—what it can charge and who will pay—as well as be clear on what it can and cannot do with the petabytes of meta data that the network will generate.
But the biggest barrier is perhaps at the customer site. Getting customers to do the things they’ve always done under the aegis of this new Business Network will require a lot of change management. That’s why the incremental rollout is a good thing: customers will need to start slowly in order to successfully adopt the full panoply of Business Network processes. But if SAP can execute on this extraordinary vision, and customers start buying in, the day will soon come when net-new businesses, products, and processes will deliver new capabilities and levels of productivity that only a many-to-many network can offer. At which point, SAP Business Network will have been worth the wait.
Joshua Greenbaum is principal at Enterprise Application Consulting.