Case study: How ACP simplifies and speeds its billing and payments using the new AribaPay cloud service

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

This next BriefingsDirect case study explores how early-adopter Arlington Computer Products (ACP) improves their financial processes and operations using the new AribaPay cloud-based B2B payment service.

Agile business services are entering into a new era, an integrated and on-demand approach to ordering, billing, and settlement processes between buyers and seller. A prime example is Ariba's partnership with Discover, the financial services organization, to create AribaPay.

At the recent 2014 Ariba LIVE Conference in Las Vegas, BriefingsDirect had an opportunity to learn first-hand how the new approach works and benefits a first major user, ACP. To understand how AribaPay fulfills the last critical step in an end-to-end P2P process, we sat down with Arly Guenther, Chief Executive Officer at Arlington Computer Products in Buffalo Grove, Illinois, and Drew Hofler, Manage Cash Solution Marketing Director at Ariba, an SAP company. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Why are companies seeking to do things differently when it comes to paying and getting more digital and electronic in how they’re settling out their accounts?

Hofler: Dana, fundamentally, B2B payment is broken, in the sense that it’s very different from consumer payments. With consumer payments, you have the item that is being bought, and the information around the payment happens at the same time, at the point of payment, with the settlement of funds.

Hofler

With a B2B payment, however, the goods that are delivered or the service that is performed is done so 45, 60, or 90 days ahead of when the payment is settled. This disconnect in time between the information around the payment and the actual settlement of the payment causes companies to have a very difficult time reconciling payments that they receive. There’s a lack of remittance information around the payment, particularly when there are multiple invoices involved to settle that payment.

You have organizations that would like to pay with electronic payment because it’s more secure, cheaper, and faster. But the people being paid, suppliers, are struggling with that, because it often doesn't contain the information that they need to settle those funds.

So suppliers would like to get paid faster and electronically, but they need that information along with it. There has never been a payment in the B2B world that tied together net-term payment with all of the information that's necessary to manage and reconcile that payment. That’s where AribaPay comes in to try to solve that problem.

Gardner: Just for our audience, AribaPay was unveiled last year at Ariba LIVE and it’s a partnership with Discover, the financial services organization. Tell us about the general availability rollout. What’s going on here this week at LIVE, and why is this is a big bash, a big coming out for AribaPay?

First live transactions

Hofler: Last year, we announced our partnership with Discover and began our development process and design phase of building out the product. This year, we’re happy to announce that we've had our first live transactions between Discover and Arlington Computer Products.

Guenther

So, the first live payments have gone through the system, and the product is ready to bring out and it will be fully available to the general public in the second quarter of this year.

Gardner: Let’s go to Arly. Tell us a bit about Arlington Computer Products, about what you do, the size of your organization, and why AribaPay was interesting to you.

Guenther: Arlington Computer Products has been in business for 30 years. We’re an IT solution provider, servicing a broad spectrum of large enterprise customers. Last year, we did about $130 million in revenue, and we’re providing best-in-class IT solutions for our customers. So when we see a best-in-class solution like AribaPay, we really want to embrace it and use it ourselves.

We’re always looking at our business trying to get more efficient and drive cost out of our model. Customer satisfaction is our top priority, but at the same time, we need to be price competitive. So we’re always looking for innovative solutions, trying to get more efficient and more productive as an organization.

The space that we've been in historically has been very manual for us, very high touch. With AribaPay, we’ve been able to re-architect our accounting system to use a cloud solution, as opposed to a manual process.

We’re always looking at our business trying to get more efficient and drive cost out of our model.

As far as Discover, we've done business with Discover for more than a decade. They’re an outstanding organization, using best-in-class technology to drive their business. If you combine that with Ariba, which is a top-notch software firm, you’re really combining two great organizations. So we were really comfortable going forward with the pilot.

Gardner: As Drew pointed out, there are numerous benefits that come with  moving to an electronic-settlement process and using an integrated approach across the partnership or ecosystem like Discover and Ariba. For you, Arly, what were the top problems or top issues that you wanted to resolve by going into this new model?

Guenther: It has been really a very manual process for us. We would generate an invoice. We had to put it in an envelope. We had postage expense and envelope expense. We’d mail the invoice out, sit and wait for a payment, a check, to come into a lock box. We’d wait for the check to clear so the funds are available.

If we followed up after 45 to 50 days, we occasionally might find that the customer didn't even receive the invoice. So we’d have to resend an invoice. It was a high-touch, manual process. Now it’s an automated process. So there are some big productivity savings for us.

Ancillary benefits

Gardner: Arly, while expanding this across more of your accounts, do you see any ancillary benefits in terms of process refinement, analysis, or productivity  insights? Is there going to be perhaps an additional payback when you scale this up?

Guenther: Absolutely. We were in the pilot. As I mentioned, we’ve done business with Discover for over a decade. They’re a fabulous customer of ours. We’ve used Ariba with Discover for a number of years, just not AribaPay. Now, we really want to take it and use it across the board in our accounting system for our customer base.

Gardner: Drew, tell us a bit more about AribaPay for those who are intrigued and want to learn more. What does it actually do? What are some of the details, and how would you go about bringing this into your organization?

Hofler: As I said, the fundamental problem with B2B payment is that disconnect between the information and settlement of funds. That’s what AribaPay corrects and bridges that gap. On the Ariba Network, our core strength is everything from sourcing all the way through to the invoice being approved and ready to pay. That’s all of the information that goes along with the payment. The invoice, the line items, the purchase order (PO) behind it, even the contract behind is all there and backing up that payment.

AribaPay then takes it the final step and, in that settlement process, connects a unique payment identifier with that and connects with the Discover network to leverage their core strength, which is secure trusted settlement of funds and the infrastructure to do that.

With AribaPay, the supplier can see where the actual payment is every step along the process

Then, Discover settles the fund in electronic manner, but that settlement of funds is now tied together with the information that came behind that payment. So a supplier receiving a payment through AribaPay can get an automatic feed into their back-end system or they can come on to the Ariba Network and see every line item that in the invoice that came behind that payment.

Hofler: More importantly, it will highlight if there’s a discrepancy between what they invoiced and what they were paid. Say they invoiced $100 and they were paid $90 because the buyer disputed an item or they thought the price should be lower, AribaPay will highlight that with the I-card and tell you exactly where that discrepancy is, so that suppliers no longer have to search through and find where the issue is.

Finally, AribaPay has a very cool feature, we call it track-and-trace for payment. It’s very much like when you order something online and you get a packaged shipped to you. You get a tracking number and you can see where that package is geographically as it comes to your house.

With AribaPay, the supplier can see where the actual payment is every step along the process, from the time the payment is approved, to the time that it gives its execution and the file is sent, to when Discover debits the buyers bank account, to when they credit the supplier’s bank account. All the way along the line, they can see every step.

That’s what it does. It bridges that gap of information, which gives suppliers the ability now to embrace electronic payments, get paid faster, and have visibility into it, because they now have all that information that they need.

Dynamic Discounting

Gardner: We’re really creating these data rich transactions, where the data follows a transaction and it allows for a much greater transparency. How does that line up with other services? I'm thinking perhaps the Dynamic Discounting at Ariba. Is there a synergy of any sort between some of these other services and what you can accomplish with AribaPay?

Hofler: There is a synergy. AribaPay is really that last step in the true P2P process. It is the second "P" in P2P, and it closes that loop and it does so in a way that gives the suppliers a certainty of payment.

With Dynamic Discounting, it's a great next step. Dynamic Discounting simply gives the supplier the ability to choose a different date for payment and offer a discount in order to accelerate that payment.

In a normal discounting platform, that choice of the supplier will be sent to the buyers back-end payment system, which will tell them that the supplier wants to be paid early. That’s the last visibility that the supplier sees and they just trust that the process will work and the buyer will then actually pay them at that time and for the amount that they are expecting.

It adds that extra layer of visibility and certainty to the choice that they have to get paid. That’s very synergistic with Dynamic Discounting.

With AribaPay, the discount choice can be tied directly to the execution of the payment. They can see with certainty that, yes, the buyer has accepted that; yes, the buyer has now executed on that. They can see when it's coming. It adds that extra layer of visibility and certainty to the choice that they have to get paid. That’s very synergistic with Dynamic Discounting.

Gardner: Arly, as you’re hearing Drew describe these services and capabilities, do you think it might alter the way that you relate to your accounts, to your customers? Is there a value-add with having this visibility, tracking, and data with the transactions that might allow you to increase your services? Is this something you can extend back into your market?

Guenther: Absolutely. From a process stand point, it's a game changer for us in terms of driving productivity and improving cash flow. Just like anything else, as you drive down your selling, general, and administrative expenses (SG and A) and your own expenses and you get more efficient, you pass those savings on to the customer. But we’re really a technology company, and so when we get a best-in-class solution like this, we really want to maximize the benefits.

Gardner: I know it's quite early in the game. We've just begun doing transactions but can you see any metrics of success, any measurement of how this would work? We are anticipating, as you mentioned, cost savings, but have we put any numbers to that yet, Arly, or is it too soon?

Guenther: We’re anticipating a six-figure savings just between handling expenses, postal expense, and supply expense, but the real wild card is cash flow. When you improve your cash flow, the opportunity cost on that cash can be pretty high. So from that standpoint alone, we know it's going to be in the six figures, but as we free up cash to do other things, that’s going to make a big difference for us.

Gardner: Drew, for those interested in learning more, how would they begin? What's a good way of starting a process where they could begin to understand and even execute on something like AribaPay?

Lots of information

Hofler: A great place to go to learn more about AribaPay is simply AribaPay.com. There is a lot of information out there, some data sheets and a form that they can fill out to learn more information and hear from us.

We have some value engineering models that can help customers, both buyers and suppliers, understand how AribaPay can help their business. That would be great for a start. One other point I neglected to make about AribaPay is that we've talked a lot about the benefits of suppliers, which is great.

It's a wonderful benefit for suppliers, but we shouldn’t understate the benefit there is to buyers of not having to manage bank-account information any more. One of the benefits of AribaPay in leveraging Discover is Discover’s infrastructure and network of merchant acquirers and the process of bringing suppliers on. They’re capturing our bank information managing it, bumping it up against all the asset control checks, all of the know your customer (KYC), and things that have to happen to verify that bank information and then keeping that bank information up to date.

No longer do buying organizations, as they do today, have to hold on to supplier bank account information, if they are going to pay electronically. That is a very big benefit, particularly in light of what we’ve see in the news lately about certain companies having had their data briefs and payment information, bank information stolen. So this eliminates that risk by offloading the management of that bank information into a trusted third-party like Discover whose business is managing that information.

We have some value engineering models that can help customers, both buyers and suppliers, understand how AribaPay can help their business.

Gardner: Drew, looking to the future of maybe 12 months from now, the next Ariba LIVE or conference of note, what can we expect? Are there some added services or more analysis and analytical benefits that you can draw? Where do you expect this to go next?

Hofler: Right now, AribaPay is going to be launched in the second quarter of this year to general availability. It’s just the beginning. It’s first being launched to the U.S. alone. The very next thing for us is expanding that into other jurisdictions. So I would look for that, first and foremost in the next year.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

You may also be interested in:

• Business success increasingly hinges on supply chain innovation and procurement advantages
• Workforce of the Future -- and Why Preparing Means Rethinking Human Resources Now
• Ariba announces business network analysis enhancements, first transactions conducted under AribaPay
• Spot buying automated by Ariba gives start-up KooZoo a means to shop more efficiently
• Combining big data and cloud capabilities for ecommerce matches buyers and sellers like never before
• Here's Why Healthcare Businesses Must Efficiently Manage Their Suppliers, Purchases, and Processes
• The Open Group conference emphasizes healthcare as key sector for ecosystem-wide interactions improvement
• Research: Spot buying automation delivers greater B2B procurement efficiency
• Blue Marble Media Shows How Mid-Market Selling Gains new Life Via Ariba Discovery
• Ariba LIVE roadmap debrief: Cloud data analytics

Business success increasingly hinges on supply chain innovation and procurement advantages

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

The next BriefingsDirect thought-leader panel discussion focuses on the future of business and how companies can benefit from the new insight and analysis that transparent business networks and processes allow.

The power of data-driven business networks and the analytics derived from them are increasing, but how do enterprises best leverage that intelligence as they seek new services, products and efficiency? How do automation and intelligence enter the picture for better matching buyers and sellers?

BriefingsDirect had an opportunity to learn first-hand at the recent 2014 Ariba LIVE Conference in Las Vegas. To learn more about how business -- led by procurement -- is changing and evolving, and how to best exploit this new wave of innovation, we sat down with Rachel Spasser, Senior Vice President and Chief Marketing Officer at Ariba, an SAP company, and Andrew Bartolini, Chief Research Officer at Ardent Partners in Boston. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: How is procurement maturing, and how do you see it expanding in terms of its strategic implications for any business?

Bartolini: Over the past 15 years, we really have experienced a procurement revolution, although at times it feels a little bit more evolutionary in nature.

In 2006, the average procurement organization, from our research, managed about 30 percent of their total spend. A mere seven-and-a-half years later, that number has doubled. So the average procurement organization is now influencing a majority of their total enterprise spend. The best in class, the leaders in the field, are now managing between 85-95 percent of total spend.

Bartolini

So procurement has risen in stature. There is now a chief procurement officer (CPO) or a single point of contact within a procurement operation at about 85 percent of organizations.

Procurement has stepped out of the back office and into the front ranks, and continues to gain in stature. As it gains in influence, it continues to guide organizations in making smart decisions within the organization and identifying the right business partners outside the organization.

Gardner: So procurement is really expanding, that it's growing up in a sense, not just a static business transaction, but something that is dynamic, living, and growing. Are more and more people getting involved with some of these newer technologies?

Spasser: If you think about the history of procurement, it really was a back-office function that was primarily focused on cost savings in a very tactical way for most companies. As we’ve seen that function evolve over the past 10 years, it has become much more strategic in nature, and it has an impact on much more than just cost savings for an enterprise.

Spasser

There have been a lot of technological advances that have given the procurement professionals the ability to move from manual processes and manual tasks to automating those and therefore focusing on higher-order opportunities to deliver value to the company.

More getting involved

More people are getting involved. For the first couple of years, there were a lot of people sitting on the sidelines, watching what was happening and trying to understand how that could impact their businesses.

Today, people are embracing networks and embracing the opportunities that networks bring, such as e-invoicing. Today, something like 70 percent of companies are using e-invoicing in some capacity. That's a huge improvement and growth over even just a few years ago.

Gardner: We’ve seen the role and impact of social and community, of community vetting of processes, and people looking to their peers for trust and feedback. We know that’s impacted a lot of things. Is this playing a role in procurement as well? Is there a social factor here?

Spasser: There are plenty of opportunities in a couple of areas. First of all, from a risk-management perspective, having more information -- information that's both qualitative and quantitative -- is only going to help procurement organizations make better decisions.

When you look at the social and business networks, the community intelligence, and the data and the insights that live within that network, all of a sudden you’re providing infinitely more information and making the procurement executives smarter, enabling them to make better business decisions, and changing the nature of their game.

Instead of having to respond reactively to changes within the macro environment or within their supply chain, you now have the ability to arm them with information that can make them proactive in their decision making, and proactive in their approach to finding new suppliers, managing existing suppliers, and that really does change the game.

Fertile time

Gardner: It strikes me that the transparency and the ability to qualify and quantify have given us some really new and interesting services such as Dynamic Discounting, like the ability to create AribaPay, and also learn about innovation in the field. We have heard about MSC, where they’re pushing their ability to deliver inventory right into their customer's environment. So, it’s a very fertile time for business procurement processes.

Any thoughts about where the next level of analysis or insight will come?

Spasser: Absolutely. Just going back to your comments on Dynamic Discounting and AribaPay, when you look at procurement, both Andrew and I have talked about it becoming a more strategic function.

When procurement starts impacting the cash flow and the working-capital management of companies through opportunities like Dynamic Discounting or AribaPay, all of a sudden, it enters a completely different realm in terms of its importance and in terms of the amount of respect and inclusion that it gets sitting at the executive table within companies.

If you arm people with information, they have the ability to make better business decisions.

When you talk about what’s next, there are lots of different directions in which procurement can go with the information that they’re given. We talked about risk management, but as companies are coming up with corporate-responsibility mandates, whether that’s sustainability or green or fair labor practices, they can be negatively impacted if they don't truly understand every tier within their supply chain.

And we see this with companies like the Gap or Lululemon in the consumer packaged goods (CPG) and retail space, where these companies have really suffered severe brand damage as a result of having issues within tiers 2, 3, 4 and beyond in their supply chain. That’s one example, but it's a powerful example of how, if you arm people with information, they have the ability to make better business decisions.

Whether that’s a business decision related to offering a discount or whether that’s a business decision about choosing to do business with a supplier or not, based on what you know about them or their second and third tier suppliers, all of this is really important and it's changing the nature of procurement.

Gardner: You brought up governance, risk, and compliance (GRC). I had a very interesting discussion here at Ariba LIVE about InfoNet, using that in association with the data from Ariba Network, and reducing that risk by being able to predict using advanced algorithms and very complex and powerful analytics platforms to see into the future and predict when risks are unacceptable.

Andrew, you’re saying that procurement taps this intelligence, and things like InfoNet have predictive abilities. What is the market telling you, and how far are we into this? Have we just scratched the surface of analytics or are we into the third inning?

Early in the game

Bartolini: With the maturation of the procurement function, we’re still in the early part of the ballgame. If you look at the leading procurement organizations today, the characteristics of these best-in-class organizations are process, discipline, an ability to execute, and driving efficiencies and effectiveness.

What's now prized within the larger enterprise and within procurement itself is the ability to be agile and to drive innovation. This has effectively pulled procurement further into the spotlight, as it really does serve as a process hub within the organization and it really does serve as the prime relationship point for third-party suppliers.

The good news in all of this is that the technology that was introduced also around the time that we started thinking about the procurement revolution has finally started to catch up to the actual user needs, from a usability standpoint, from an integration standpoint, from a time-to-value standpoint.

We’re seeing organizations now move from the initial adoption, where they are just trying to get activity through their systems, to becoming more effective in their usage of these systems and technology.

The skills that reside within the average procurement organization are not where they need to be to be thought of as world class or operational excellence.

When you look at the challenges that a CPO faces, a lot of that is driven by the talent that resides within the organization. Sometimes that's doing more with less. It’s very hard for CPOs to get a new job requisition, even in very large companies, it's a challenge to get that investment in procurement.

Also, the skills that reside within the average procurement organization are not where they need to be to be thought of as world class or operational excellence.

Enter technology and automation. When you look at the reams of data that sourcing and procurement activity generate, the skills of the average procurement organization to go in and analyze and find the right trends, whether that’s pricing trends or identifying key risks, is still not where it needs to be. So, it’s early stages there.

But with things like InfoNet and business networks you’re starting to see the co-location of transactional information, communication that supports those transactions, and then an ability to analyze and make decisions based upon that, all within one central location. That's a very powerful asset for procurement.

Gardner: And not only in one location, but in a cloud environment, where information from an entire industry can be brought together with the proper anonymization, security, and privacy in place -- but then the insights can be global or scaled down to individual organizations.

Opening up

Bartolini: This is an area where enterprises are finally opening up. I worked in this industry 15 years ago, and everything was very proprietary -- our requirements on certain products or items or how much we were spending.

The Internet has really opened it up. Information is at everyone's fingertips. Organizations are starting to understand that there is value that can be created by sharing information in an industry, and particularly with trading partners.

From our research, we’re seeing that organizations can invest in a business network today and get a payback within a year, just based simply on transactional efficiencies.

Where this gets more interesting is when you start to introduce other social aspects. When you start to introduce third-party specialists, who can offer services that add value to all of the participants in a network, it becomes a very interesting place to be. That’s why there's such interest and excitement around business networks.

Leveraging specific skills will be more important, whether that's through contingent workforce or through hiring to very specific skills.

Gardner: It strikes me too that procurement is expanding its importance to companies. When we think about some of the labor issues that many are forecasting with the workforce of the future, it’s going to be difficult to get a highly skilled full-time employee. Or you might want to have them for a shorter period of time. So procurement becomes a facet of hiring. It becomes a labor-acquisition process as well, and then, of course, it goes to more services than just products or merchandise alone.

Rachel, the question is how strategic do companies view this? Andrew says that we need to get more competency and sophistication in procurement. Do companies appreciate that this is really more and more a part of their core assets strategy and a core competency?

Spasser: Definitely. Even this morning, I was speaking with a number of CPOs who talked about human resources as a key factor in whether they’re going to be able to get to the next business level.

I would agree wholeheartedly with Andrew that the skill set is going to be different than it has been in the past. Leveraging specific skills will be more important, whether that's through contingent workforce or through hiring to very specific skill sets.

One of the interesting things that we’re seeing is that, in a lot of companies, the procurement function becomes a rotation within the executive ranks, as they’re bringing people up and training them to be in higher levels of management. We see many of our customers taking people who really don't have a traditional procurement background and cycling them through the procurement function.

In fact, SAP is doing that itself. Marcell Vollmer, who has been a great advocate of Ariba, is not a procurement guy by trade, but has really made a huge impact on SAP procurement because he brings a different skill set. He brings that analytic background, and he brings that general business and relationship management savvy.

Complex services

When you look at the types of spend that companies are trying to attack today, you’re looking at complex services and you’re looking at a contingent workforce. Those take on a life of their own, because they are very, very different than buying a physical good.

We live in a service economy, and as that continues to evolve, it’s going to become more and more important to procurement and to companies as a whole.

Gardner: Andrew, thinking a little bit toward the future, we’ve talked about procurement now having a heightened role and a larger profile because of the analytics that are being brought to bear: The wider purview across services, and the impact with human resources, rather than just goods and materials and facilities.

As we get to more of a digital economy, a networked economy, like we’ve seen in consumer behavior, what do you see for companies when it comes to this notion of a shared supply chain -- that we’re all interdependent parts of a supply chain, and that we need to be thinking about it differently? Where is the shift in thinking that needs to come, and where does your crystal ball show you we’ll be in five years?

The consumer today really expects better, newer, and more innovative products in a rapid fashion and at a cheaper cost.

Bartolini: The consumer today really expects better, newer, and more innovative products in a rapid fashion and at cheaper cost. That's the world of procurement.

If you’re a procurement professional and your supply base looks much like it did 10 years ago, there are problems on the horizon. If your supply chain and your supply base looks like it does today come 10 years from now, there’s going to be questions as to the viability of your company.

The speed of business is most visible in areas like consumer electronics. You see the leaders in smartphones in one cycle are out of business five years later. This is happening in other supply markets. It’s not as visible, and maybe it's not as fast, but it is happening!

Organizations understand that the window of opportunity to generate a premium on their products and services has collapsed, and they’re increasingly relying on their supply chains to support capitalizing on those opportunities. That really creates a shift from net-sum negotiations to win-win negotiations. That creates a shift from managing contracts and service-level agreements (SLAs), to managing business outcomes. That really changes the view of a supplier from an order taker to one that’s a key collaborator.

Gardner: Rachel, thinking about organizations wanting to do this better, maybe they listen to this podcast or read this and they think, “I see procurement as more of a core competency, having a greater impact on our company. If we need to move at the speed of business going forward, we need to get better at this.” How do you start? Any ideas about resources, methodologies, and workshops? How do you get a new procurement competency process going in your organization?

Spasser: One of the greatest ways to learn is to learn from your peers. Conferences like Ariba LIVE really provide that opportunity, because you get the best of the best, and they’re sharing their true stories. And it's not just success. They’re sharing their pitfalls too, and they are sharing how they navigated through those to achieve the business outcomes that they sought.

Talk to peers

There are lots of books to read and experts to talk to, but I think that the best way to learn is to talk to peers who have been through the same process and who have candid feedback and candid advice to share.

Gardner: Perhaps identifying leaders and influencers in your field and following them on blogs or Twitter or other community-based and social-based interactions?

Spasser: Absolutely. There are plenty of communities, whether they’re on LinkedIn or whether they’re proprietary, like Ariba Exchange, and these discussions are happening everyday. I would encourage people to seek those out, participate in them, go to events, and really learn from those who are leading the way, because if they are not going to be on the train quickly, they are going to find themselves left way behind at the station.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

You may also be interested in:

• Workforce of the Future -- and Why Preparing Means Rethinking Human Resources Now
• Ariba announces business network analysis enhancements, first transactions conducted under AribaPay
• Spot buying automated by Ariba gives start-up KooZoo a means to shop more efficiently
• Combining big data and cloud capabilities for ecommerce matches buyers and sellers like never before
• Here's Why Healthcare Businesses Must Efficiently Manage Their Suppliers, Purchases, and Processes
• The Open Group conference emphasizes healthcare as key sector for ecosystem-wide interactions improvement
• Research: Spot buying automation delivers greater B2B procurement efficiency
• Blue Marble Media Shows How Mid-Market Selling Gains new Life Via Ariba Discovery
• Ariba LIVE roadmap debrief: Cloud data analytics

HP ART documentation and readiness tools bring better user experiences to Nordic IT solutions provider EVRY

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy.

Nordic IT solutions provider EVRY has taken automation and agility to new heights in its training and documentation of IT products and services, and found that even small steps can make a valuable return on user adoption patterns.

By using HP's Adoption Readiness Tool (ART) to help its employees work better with IT management solutions and processes, EVRY, based in Oslo, has gained new advantages in the adoption and understanding of both new and existing technology.

BriefingsDirect had an opportunity to learn first-hand how EVRY mastered production of documentation and readiness tools when we interviewed Sigve Sandvik, Solution Adviser at EVRY, at the recent HP Discover 2013 Conference in Barcelona. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions. [Learn more about HP ART.]

Here are some excerpts:

Gardner: Tell us first a little about EVRY, what your organization is, how big they are, and what you do.

Sandvik: EVRY is Norway’s biggest IT solution provider. We’re the result of a merger between two of the former biggest companies in Norway. We’re approximately 10,000 employees, based in 50 locations, mostly in the Nordic region and the Baltic, and we also have some colleagues in India. 

Sandvik

Gardner: So you are both a big user of IT, as well as helping your customers  improve their businesses through better IT practices?

Sandvik: That’s true. My team, called the ITSM Tools Department, delivers tools to our employees globally, and also directly to our customers. But most of my customers are also my colleagues.

Gardner: What are some of the problems that you have had has as you have tried to get the most out of HP Service Manager?

Global tool

Sandvik: HP Service Manager is used widely in EVRY. It’s a global tool, and all employees can access the system. Since it is a global tool, there are lots of people out there who need to know how it works.

For example, if they are entitled to just to call the internal help desk, they can do that. But some may not be allowed to call the help desk. They need to register a ticket themselves. They need to have a place to find information. That’s the main issue when it comes to HP Service Manager, and what we need in terms of documentation and user guides.

Gardner: Tell us about your journey. What did you do and how did you discover HP's Adoption Readiness Tool, or ART? How did it work for you?

Sandvik: Actually, it was a coincidence that we discovered ART. My former manager was attending a conference, I am not sure which one, but it was an HP Conference. He discovered that there is a product out there that could actually help us make our documentation and user guides better.

Before, when we signed up with an external vendor, they helped us with recording the process, for example, and on making a new interaction. They helped us with that, and they also made the voice-over and printouts or the text from the voice. So it was basically a video you can play back.

The problem with that, of course, is that when we got the video, it was already out of date because we had already moved on with the next release of our system. So the product wasn’t optimal anymore. Besides, we had to pay the vendor a certain amount of money, and then if we wanted to change it, they billed us extra for it.

Gardner: Explain how you were able to make the time-to-value compressed. How you were able to create these documents, this training, these assets, but in a way that they weren’t obsolete by the time you were able to use them?

Sandvik: With the external vendor we had used before, the product was already made. We weren’t able to change it, but with HP ART we were in a position where we could, within an hour, make a small simulation and present it in a portable format -- for example as a PDF or Word document. We could also  present it on-screen, with voice, and in multiple languages as well. But the most important thing is that we were able to maintain the user guides and the documentation as we go. So we could just add new parts and edit parts of the documentation we already had.

Gardner: And have you been able to expand the products and services that you have been developing these assets for? How widely are you using ART? 

Available resources

Sandvik: Today we are using ART not as much as I would like to. In a perfect situation, I think EVRY would really benefit if we made even more user guides with HP ART.

We have made a lot of user documentation, which we send to our customers, vendors and external subcontractors. The responses we get from these are really good. Also, the response we get internally in our organization -- when they see that we have these products and these user guides -- is that they want more. We would really benefit if we could only find time to make more documentation.

Gardner:  For others who may have not been using this real-time and adaptive training capability yet, now that you have been doing it for a while, do you have any tips or suggestions for them? Do you have any words of wisdom for others who are considering this?

Sandvik: There are three things needed to make good simulations. You should concentrate on making small bits. Do not make the recordings too large. You should also think about how you want to present your documentation. Concentrate on one bit at a time, and then put that all together. For example, in an online course, with HP ART, you’re able to assemble several simulations together.

We have made a lot of user documentation that we send to our customers and also to our vendors and external subcontractors. The responses we get from these are really good.

In our online course, where you have the embedded menu, you can run the whole course, or the users can click on a specific item of interest. They don’t have to run through the entire course. They can just click on the specific item they want to learn a little bit more. So I would start by making small recordings first.

I also recommend spending time on fixing the template. When you buy the product, you will have the HP fonts and logo. We’ve spent some time adapting the tool so it has the EVRY logo, colors, and fonts in the template. It looks nice and is familiar to our employees.

Gardner:  Have you been able to measure how the users of the product or products gain from the use of ART? Is there a soft or hard metric?

Sandvik: No, we haven’t. Perhaps we should measure how we’ve improved our learning or our own internal use of the user guides. That is perhaps something we will have a look at.

With HP ART, for example, you can also make assessments of where your users have viewed simulations, and then on the next page you will be tested. So we could easily track which employees have taken the given course. We haven’t yet asked our employees if they really use the documentation more.

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Workforce of the future – and why preparing means rethinking human resources now

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

The next BriefingsDirect thought-leader interview focuses on the fascinating subject of preparing for the workforce of the future. It's now clear that we are entering into a very diverse and even unprecedented work environment -- something the world perhaps has never known.

But how do enterprises prepare, and how do they create the means to analyze and manage the transition to very different work environments? BriefingsDirect had an opportunity to learn first-hand at the recent 2014 Ariba LIVE Conference in Las Vegas.

To learn more about hiring and acquiring talent and managing a diverse and socially engaged -- and even more knowledge-driven workforce -- we sat down with Shawn Price, President for Global Cloud and Line of Business at SAP, and the former President of SuccessFactors, now part of SAP. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Now, this is a really fascinating subject for me, this new diversity and this talent-oriented workforce. But companies must be thinking, how do I reduce risk? How do I think about making this an opportunity rather than a challenge?

Price: Dana, if you think about it, what you have just described is the company that has already started to take steps to make sure that they don't get caught unprepared for the future.

Price

A lot of companies are having to respond to dramatic changes in their operating models, where they’re driving revenues against the backdrop of a global economy. And companies are required to deploy flexible workforces that can be engaged and can change with this fast business environment that we’re in.

We have a scenario here in the US market, in particular, where every day, 10,000 people turn 65 and that will continue for the next 19 years. So you have an experienced staff that's leaving the workforce. Then, on the front-end, you have a talent shortage. There just are not enough millennials to replace that exodus that’s occurring.

The astute companies of the future have mapped this out, have laid a plan, have started to build warm pools of talent, and understand this in everything that they do. They’ve tied their strategy to their people strategy and acquisition, and they’re really managing it for the cultural nuances that the regions that they operate in require, and they’re pretty flexible and nimble.

More diversity

Gardner: One of the characteristics, as I understand it, is that there is more of a diversity in the ways in which employees or talent are engaged with a company, many more varieties than the full-time, 40 hours a week, 9-to-5 employee type. This seems to have some upside, but it's different. You don't manage folks in the same way when they’re working through these different models.


Price: There’s a real movement and emphasis on personal brand. To a degree, you’re starting to see free agents in the market. When you look at it on the retention side, planning strategy to the right people, to the right place, and at the right time, with a lot of millennials that are entering the workforce there is a clear six month delineation. That is the greatest risk for your company to lose that talent.

They’ve come in, they’ve looked around, and they’ve decided whether they’re actually advancing their personal brand, their knowledge base. It's less about hierarchy and the old models of the past. They’re making a call on whether they’re actually advancing and learning or it's more tenure based. The way we measure is different as well.

One measurement that's completely different than anything that we’ve done in the past is your engagement index: How much do you contribute? How much is your content consumed? How engaged are you in the day-to-day?

Gardner: I suppose there’s another complicating factor. I’ve read that by 2020, there will be five different generations working together, and each with a very different set of skills, experiences, expectations, and behaviors. It means that companies can’t have a one-size-fits-all approach to this. In fact, they might have to be able to have multiple ways of engaging.

We need start to create a relationship at a much earlier point in order to create these warm pools of talent.

How does that factor into what you’re talking about, the workplace of the future. I guess we should talk about the enterprise of the future, and that they need to have a diversified approach, not just a single way to engage?

Price: You’re absolutely right. If you look at talent acquisition today, it has shifted. The focus used to be in the past on how do I put as many people as possible through my applicant tracking system, but today it's far more strategic. It's where do I need them and how much do they cost. We need start to create a relationship at a much earlier point in order to create these warm pools of talent.

Second, it's really asking who are my best performers, where are they from, and how do I get more of them? If you have a particularly productive intern program, for example, which college are you drawing talent from that's performing the best in the specific function? So the workforce of the future looks vastly different.

The power of how talent is acquired has shifted subtly as well. It used to be solidly in the hands of the employers, but today it's a two-sided equation. If I’m hiring somebody, I often do interviews over SMS or text, because it's a stream of consciousness. It's not a prefabricated dialogue.

But I also look at their LinkedIn profile, which is how they want the world to see them. I look at their social media profile. And then the most valuable thing to me is the peer references that exist in my network that can validate that that individual is who they’re representing themselves to be.

The flip side

But the flip side of that is we have websites that allow the applicant to look into the leadership style. They can connect to their network of people that may have worked for that leader in the past. They can see if the culture that they’re espousing is working.

So you have the fundamental shift in how you’re attracting, retaining, and working with talent that is completely different from things in the past and the way that we have done it.

What the future will hold is that we’ll go to a point where you will carry your composite profile of who you are and that will be made up of both social media external to the company, the LinkedIn profiles, and in some cases, even your performance reviews, where it's appropriate to externalize it. All of that will go in your employee record that will follow you throughout your career. Systems will automatically update that, and so it will be much more consumable.

Smart companies that are innovating are redefining the processes by which they engage. In retail, for example, you have seasonal workforce, and that seasonal workforce typically has to go through the entire recruiting process again if they come back the following year.

We’re encumbered in many ways to systems and thinking of the past around some of these talent acquisition processes that are so core to delivering on the strategy.

Maybe I had a good experience year one. If I reapply, now I’m going through the website, now I’m doing verifications. Why can't we re-imagine the on-boarding to be, “Dana, you worked with us last year. You did a terrific job. We’d like to have you back. Is everything the same?” In fact, you can put an application on your smartphone with which you can make sure that the information is accurate, and then turn you on as an employee in the system automatically.

Instead, we’re encumbered in many ways to systems and thinking of the past around some of these talent acquisition processes that are so core to delivering on the strategy.

Gardner: Shawn, thinking about the past, I suppose we used to measure things pretty directly -- productivity measurements, top line, bottom line. Is there a new way to measure whether we’re doing this correctly, whether we’re getting the best workforce and best talent, ramping up to give ourselves the resources we need as organizations to meet our own goals? Should we not think about this in productivity terms? What's the right set of metrics?

Price: It's funny. We will always be top-line and bottom-line driven to some degree, but the measurement isn’t necessarily productivity. Maybe it’s rethinking processes that can have a material impact. One is this learning management notion, where I was describing engagement. Imagine you are on-boarding to a new company. The most important thing for me as that hiring manager is to get you up to speed and, in your words, productive as quickly as possible.

How did we do that in the past? We put you in a training course or maybe state-of-the-art, an online web-based training course that would run days, if not weeks, on end to try and have you assimilate everything that we needed you to learn.

Moving ahead

The new world, which is not based on that, is trying to move that on-boarding and productivity ahead. The way that we’re doing it is we are saying, “We already own all of the subject matter expertise required to on-board somebody. Wouldn't it be cool if, before you even join the company, you could connect by a social network, not one of these isolated ghost towns that stand on their own, but a social network connected to HR or connected to Ariba?”

We could have you engage with somebody doing your same job, so you could ask that person anything you want before you got there -- what should I read, what should I learn, who should I talk to, what's my first week like? That engagement was already occurring.

Then, when you arrive in the company,  it would be your compliance learning, and the normal HR functional learning, but you would also take advantage of subject matter expertise.

Today, the way that we learn is not in large chunks of data. Think about YouTube. It's web downloadable, consumable in five minutes on my mobile device. That content that I need in order to be enabled and to thus be productive is available from my coworkers in the form of a five-minute video. Or there's this advent of massive online communities that are producing content. Or I may choose to bring in an expert from outside the company to create content.

The visualization that I have is Khan Academy, where the most complex topics are searchable and digestible via mobile in 15 minutes. That's where we’re seeing the shift from just pure top line and bottom line to rethinking what on-boarding and engagement look like, and what does that ultimately do to the acceleration of someone’s comprehension? There are many, many examples.

Many times social networks are established as standalone entities and they become ghost towns after a while.

Gardner: Are you saying that companies need to start to become more open and social and create content and the media and mechanism, so that they can be in a sense part of this community? And how far along are companies in actually doing that?

Price: Many times social networks are established as standalone entities and they become ghost towns after a while. You kind of lose interest because they lack content and context.

When you attach it to an actual application, you can publish dynamically to that community, and you can search and see, for example, what was the number one search content today, this week, this month.

Increasingly, I’m starting to see things on people’s resumes like their engagement index, which says, “I was the number one producer of content for my company that was consumed by the social network.” You’re seeing stack rankings of that nature and form.

Cloud strategy

Social will become, and has become, an enormous component of our cloud strategy. In fact, today, we sit with more than 12 million subscribers on our social platform.

We have a large hotel chain that is actually using it to manage contract labor and part-time labor, because they want the engagement. They want the connection, but they want to be able to connect differently to them than the employee who is a full-time employee. And this hotel chain has over 170,000 contractors in their communities, and they’re grabbing information and all the expectations.

The other part of social, of course, is the mobile side of it. Our networks and our access to vast amounts of skills that would have in the past been hidden are now available to peruse, almost like a skills catalog within your own organization. You’ll find things that you didn’t even realize you had in pockets of the globe. People’s skills that you wouldn't necessarily have on file even are now apparent through that dialogue.

Most companies are going through this transformation in HR because of the macro trends we’ve been describing. What they’re ultimately trying to figure out is how do I create a strategy? How do I build a set of applications that allows me to execute against that strategy and measure whether I’m performing? And how do I drive cost out of it?
For many companies, they visualize this at the top line and the strategic level, but they also visualize it as a process, and they think of that process as recruit to retire. We believe that you can start anywhere, but you’re going to end up with this process that's interconnected.

Maybe your starting point is recruiting, because you have a lack of talent or you’re opening or you’re expanding. Maybe you have a learning management on compliance, or maybe you have performance and goals where you’re actually measuring the progress. You can start with any application and interconnect it over time.

We have actually completed the entire portfolio of applications end to end in the market. Think about Ariba’s connection with HR, which seems like a funny thing to say. On the Ariba Network today, we have 1.5 million connected companies. We’re adding one every three seconds. Imagine in that supply chain, in that labor pool, what would be available to you if you were to publish a job requisition, for example.

So we look at it as recruit to retire. Where the world is going though is our cloud applications. Today, we manage in excess of 35 million subscribers, the byproduct of people working with us like that is two-fold. One, they tell us very quickly what they like and don't like, which allows us to innovate very quickly. But the other side that you raised is the predictive side.

Predictive analysis

HR is really wide open right now for predictive analytics, and the only way you get there is by having scale of people using your system. Today, for example, we have built 2,000 key performance indicators (KPIs) and benchmarks to be able to tell us things like, what is my management bench strength, today, 30 day, six months, and a year from now? Who is ready and who is going to be ready, because of course that’s dependency to your strategy?

Or what's the voluntary turnover rate? We talked about five generations in the workforce. For experienced workers, what's my voluntary turnover rate versus the millennial workforce?

Where we’re getting to is really being able to correlate multiple indexes to give us a predictive view of what's going to happen. And that’s pretty exciting. That’s a pretty big breakthrough that we’ve seen.

Gardner: If I understand you correctly, Shawn, we’re talking about being able to analyze what's going on inside your company across many aspects of the business to better know what your requirements are going to be vis-à-vis talent and in human resources. But you’re also analyzing externally something like the Ariba Network and/or social environments so that you can then, if you can't hire, you can procure, or perhaps the boundaries between them are shifting as we get into more services procurement and we automate.

The community component of this is really fascinating -- contributing best practices in new ways.

But the key here, I think, is the analytics. We need to analyze better what we’re doing and how we are doing it, but we also need to analyze what's going on externally. Sometimes, that’s difficult without a third party, a partner, or a platform. How do you advise companies to be able to do this sort of comprehensive analytics capability?

Price: It's a great point. We have analytics on a particular application. So if you want to instrument learning, that exists. There is analytics that cross the recruit-to-retire spectrum.

But then you hit on a really good point. How am I in category, in mining for retention for this cost of worker, or how am I for recruitment and retention ratio relative to a 100 other minds? You’re absolutely right. You can do it within an app, across an app, and using the power of the 35 million subscribers look at patterns that exist within an industry or a best practice.

The community component of this is really fascinating -- contributing best practices in new ways to look at things and new indexes that companies build and publish to the cloud so our communities can consume those new ways of looking at a particular process is an exciting time. The byproducts are 2,000 KPIs that you subscribe to, to not only give you what is best in category in your industry.

Gardner: Are there some examples of being able to create campaigns that start to pull this together? It seems to have an impact across many parts of the business. We need to think about change. We need to put in the technology. We need to think more social, engage people in different ways, and think about sourcing of talent in different ways.

We’re at a state in the market and the technology today where it's really a matter of imagination more than anything else.

Is there any precedent that you can point to of a campaign of some sort that has begun to make the shift? Perhaps there’s a methodology that we can look at.

Price: We’re at a state in the market and the technology today where it's really a matter of imagination more than anything else.

If you take retail, they have always had a historic problem of getting the right amount of talent, in the right place, at the right time, as seasonal as they are. They may have two weeks of hyper growth and they may have a great season or a bad season, but if they’re slow, they can't hire enough talent.

So retail has re-imagined hiring. Of course it doesn’t fit all, but in some large global multinational chains, they found that the actual people that shop in their locations is the same demographic of people that work in their locations.

So they said if we can build a smartphone app that would allow you to apply while you are in the store, and the manager in the store at that time can see your resume or your LinkedIn profile, we can put you together and collapse this formal hiring process of weeks into potentially hours. This is just a complete re-imagination of recruiting. They collapsed all of their hiring from weeks to days.

We’re seeing this across all areas of the business, the ability to transform and visualize data. Where did I get that last recruit from that was so exceptional, and what is the profile of that individual? Talent doesn’t necessarily look like we think it looks from the past. Talent comes in every gender, every diversity, and from every corner of the globe. So what patterns do we have in our workforce that we want to replicate? The impact isn't just productivity, as we described. It's the engagement and contribution.

Creating a connection

Then, if you think about some of the other areas, you just follow this example. If I’m joining a company as a new sales rep, that application should be smart enough to look within my company for people who have worked with me before, create a connection over social and say, do you want to go for coffee, congratulations.

Maybe it goes out and sources over the Ariba Network for all of my laptop, my mobile, everything that I need. And if it's really smart, it takes all of my contacts and pushes it into my customer cloud, because I will have been selling to the same people over and over. That’s an example of a process that will run across four legs of the application stack. We’ve never been at a more exciting time -- ever.

Gardner: When you were speaking, you reminded me of the mantra several years ago in customer relationship management (CRM) of know your customer well, know them end-to-end. It now sounds as if we need to apply that to the employee.

The informed companies of the future will know their workforces better than anyone.

Price: Absolutely. If you don't, and you don't really have the engagement level, you’ll probably have a talent shortage, because you’re not measured hierarchically any more. You’re not measured on the old traditional way. It’s about what you get in your personal brand. The informed companies of the future will know their workforces better than anyone and know how to replicate and scale them up or down at will and on-board them instantaneously.

Gardner: Perhaps the corporation of the future isn't a single brand, but an amalgamation of many thousands of brands for all the people contributing to their common goals?

Price: Absolutely.

Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

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