Ariba Shifts Strategy from E-Procurement to Spend Management Solution Provider
June 18, 2002 (TOKYO) -- Robert Calderoni, president and CEO of U.S.-based Ariba Inc., a leading company of business-to-business solutions, visited Japan and announced its business strategy.
The company's major product is "Ariba Buyer," an enterprise procurement management solution for indirect materials via the Internet, which Sony Corp. Matsushita Electric Works Ltd., Seven-Eleven Japan Co., Ltd. and Asahi Breweries Ltd. use in Japan. Calderoni said that since the Internet bubble has burst, now is the best time to improve the workflow system by managing expenses via e-procurement and other means.
"We have been providing electronic commerce solutions or e-procurement management system, which enables companies to manage purchases electronically. However, from now on, we will provide spend-management system, which enables companies with a single solution to manage overall spending associated with running their business including price negotiation and analyzing their spending on items," he said.
He added that the company has shipped six products for spend-management solutions, in addition to the e-procurement solution, "Ariba Buyer," in the past nine months since he was appointed CEO. Four products of the six products have been shipped to Japan. "The demand for Ariba Enterprise Sourcing, which enables a buyer to offer reverse auctions among suppliers and to choose the supplier through effective price negotiations, is especially strong," he said. Calderoni said sales of Ariba Enterprise Sourcing now account for more than 30 percent of Ariba's total sales. "Many companies implementing this solution have successfully cut costs by about 15 percent. Among them, one company reported that it realized 70 percent of cost-cutting, with total spending of US$5 million," he said.
"E-procurement has been overestimated since introduction of the solution has boomed out among companies," he added. "During that time, members in the systems group, not in the purchasing group, have mainly implemented the system without any reform in the business operation. The main purpose of the e-procurement is not to implement the system itself, but to realize business reform and reduce expenses by managing procurement. Therefore, we believe now is good time for companies to work out business reform after the burst of the IT bubble."
Related stories:
-Sony to Use Ariba's Indirect Materials Procurement System in Group Companies
-Infoteria, IBM Japan Join on Systems for Ariba B2B Network
(Tsuyoshi Otake, Staff Editor, Nikkei NetBusiness) |
