The Networked Enterprise

Tim Minahan, Ariba

Fueled by digital communities, companies are connecting and collaborating in new ways to drive better performance and profits.

We live in a networked world. As consumers, we tap into personal networks like Facebook, Twitter and Amazon.com that help us learn, share and shop better. And this is changing the way that we do business. Leading companies are now leveraging digital networks to more efficiently engage with their trading partners and collaborate across the entire commerce process. And In the process, they’re creating a new way of operating that will drive the future of business commerce: the Networked Enterprise.

At its core the Networked Enterprise is all about relevant connections and efficient collaboration. Businesses realize that they can no longer be competitive on their own. With supply chains that stretch around the globe, they are more reliant on external partners. And as a result, sharing information and coordinating processes is critical.

Social networks have made it easier than ever to drive conversations, gather intelligence and manage relationships. Facebook has created the world’s largest network of personal connections. Amazon offers the world’s largest and most convenient network for personal shopping. Everything you need to manage your personal lives is contained within these networks – there’s no need to leave them to make things happen.

Business networks provide an equally easy way to link and coordinate a virtual ‘extraprise’ of partners into a shared community executing improved and coordinated processes in a more informed way than in the past. And with increasing frequency, companies are tapping into them to enable a new, connected way of operating.

This shift is being driven and accelerated by trends like cloud computing, mobility and the convergence of enterprise applications, social media and communities.

The impact of this convergence is clear in the consumer world. Whether searching on Google, shopping on Amazon, downloading music from iTunes, or engaging on Facebook or Twitter, we use networks to run our personal lives because they make things easy.

When shopping on Amazon, you don’t worry about connecting to each individual merchant. When it comes time to pay, you don’t worry about integrating into each individual bank or credit card company. It’s all done for you within the Network. “Whether you’re buying a book or a blender, you get the same simple shopping experience. It’s all transparent and easy for the end user.

Now, businesses are demanding the same experience. Companies are looking beyond the traditional view of IT to extend their procurement, sales, and finance processes and systems outside their four walls. They want to discover, connect, and collaborate more efficiently with their trading partners, and they want to do it all as easily as they do in their personal lives.

Just as Facebook is the destination for people looking to more efficiently manage their personal networks and activities, business networks are the destination for companies looking to better manage their trading relationships and commerce activities.

Much like their social counterparts, business networks provide:

• • Cloud-based applications that allow organizations that share a business process to share the underlying technology infrastructure that enables that process.
• • A community or network of partners through which companies can quickly discover, qualify, connect, and collaborate with trading partners.
• • Capabilities in the form of best practices, community-derived intelligence and other unique features or services that allow members of the community to gather intelligence and make more informed decisions.

A decade ago, there was serious debate about the viability of the Internet as a channel for business – or even a tool to power it. Today, it is clearly a driving force of productivity and profitability:

• • McKinsey & Co. found that companies using collaborative technologies like business networks to align with their partners were outperforming their peers in every category of business performance by a wide margin.
• • A CFO Magazine study found that global finance executives view using technologies – like the cloud and business networks – to better discover, connect, and collaborate with their customers, suppliers, and other trading partners as a top priority for agility and growth.
• • And CIO Magazine reports that IT executives are also prioritizing investments to improve external collaboration.

Innovative companies are already on the bandwagon, unleashing the power of business networks to drive future growth, profitability and differentiation across their businesses. And more will surely join.

As with any new way of doing things, there will always be detractors. Back in the day, critics said the automobile was a neat toy for hobbyists, but it would never replace the horse. When the first computers arrived on the scene, industry watchers predicted ‘there is a world market for maybe five’ of them.

But companies that embrace the networked model stand poised to deliver their organizations to new levels of productivity and profits.

Tim Minahan is Executive Vice President, Network Strategy and Global Marketing for Ariba, an SAP Company. A pioneer in business-to-business collaboration, Mr. Minahan created the market for business networks and the vision for the networked economy – a world in which companies leverage the power of social and business networks and advanced analytics to enhance collaboration, insights, and productivity. In his role with Ariba, Mr. Minahan is responsible for the strategy behind the Ariba Network, the world’s largest and most global business network, and for the design and execution of effective messaging, go-to-market programs, and marketing initiatives to fuel its growth.