SAP Business Network Aims to Integrate Fragmented Supply Chains

SAP SAPPHIRE NOW — SAP has an ambitious plan to integrate its disparate supply chain networks with the launch of SAP Business Network. The initiative, revealed Wednesday at SAP’s Sapphire NOW conference, combines SAP’s logistics and asset networks, along with its Ariba marketplace.

The SAP Business Network promises to provide greater visibility and management within supply chains that have long been fragmented. The integration of Ariba, SAP Logistics Business and SAP Asset Intelligence will provide unified business processes across buyers and suppliers. Collectively, SAP claims it will bring together 5.5 million enterprises into a common trading network.

CEO Christian Klein introduced the SAP Business Network during the opening keynote session of Sapphire NOW. Running as a digital event throughout mid-June, expect details on deliverables to emerge during subsequent Sapphire NOW sessions.

SAP CEO Christian Klein presenting at SAP SAPPHIRE NOW 2021

“We believe that industries will be revolutionized when businesses turn into communities,” Klein said. “We want to connect every company across your entire supply chain, and in doing so, provide you with immense value from being a member of this community. Buyers, multitier suppliers, logistic providers, manufacturers and banks will be able to respond to any disruptions real time through their connections in the network.”

Klein acknowledged that the SAP Business Network is a “bold vision.” But he emphasized SAP’s formidable role as a supplier of ERP solutions and its sizable customer base.

“And because our applications run supply chains across every industry, we have the most relevant data and expertise,” he said.

Challenges Ahead

While delivering on the vision of the SAP Business Network is a major undertaking, SAP also faces many challenges.

EA Consult’s Joshua Greenbaum

“There are many moving parts and there’s a lot of work to be done,” said industry analyst and ERP consultant Joshua Greenbaum of EA Consult. Once SAP integrates the siloed networks, onboarding will be a major task as well, according to Greenbaum.

“How do you onboard that critical mass of suppliers and partners to make it worthwhile,” Greenbaum queried. “The Ariba Network is a good starting point, but it is not in any way a done deal.”

Nevertheless, Greenbaum believes the company is strongly positioned to deliver on the promise of the SAP Business Network.

“This is SAP’s opportunity to lose,” Greenbaum said. “They are in the best position, in my view, of any of the enterprise software vendors to actually do this. They need this win badly and they should get it. If they don’t, it’s shame on them for failing.”

Noting its complexity, SAP said it will onboard – free of charge – customers’ 100 most strategic suppliers onto the SAP Business Network within 90 days of going live.

“That in itself says something, because they’re offering that incentive,” Greenbaum said.

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