Monday, May 4, 2015

Ariba's product roadmap for 2015 leads to improved business cloud services

The next BriefingsDirect thought-leader interview focuses on the Ariba product roadmap for 2015 -- and beyond.

Ariba’s product and services roadmap is rapidly evolving, including improved business cloud services, refined user experience features, and the use of increasingly intelligent networks. BriefingsDirect had an opportunity to learn first-hand how at the recent 2015 Ariba LIVE Conference in Las Vegas.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy.

To learn more about the recent news at Ariba LIVE -- and also what to expect from both Ariba and SAP in the coming months -- we sat down with Chris Haydon, Senior Vice President of Product Management at Ariba, an SAP company. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Here are some excerpts:

Gardner: Before we get to the Ariba news, what do you see as having changed, developed, or evolved over the past year or so in the business network market?

Haydon: It’s been a very interesting year with a lot of learning and adoption for sure. There's a growing realization in companies that the networked economy is here to stay. You can no longer remain within the four walls of your business.

It really is about understanding that you are part of multiple business networks, not just a business network. There are business networks for finance, business networks for procurement, and so on. How do you leverage and harness those business networks to make your businesses more effective?

Balancing needs

Gardner: So it’s incumbent upon companies to take advantage of all these different networks and services, the data and analysis that’s driven from them. But at the same time, they need to retain simplicity. They need to make their users comfortable with this technology. They need to move toward a more mobile interface.

Haydon
How do we balance the need for expansion, amid complexity, with simplicity and direct processes?

Haydon: It’s a difficult balance. There are a couple of ways to think about it as well. Just to pick up on the point on how businesses are changing, certainly the end-user expectation is dramatically changing. Whether it’s the millennials coming into the workforce, the nature of apps, mobile apps, in our personal lives driving the need, the requirement, the desire to have that in our business lives is there.

From an Ariba perspective, we believe our job is to manage complexity for our customers. That’s the value prop that people sign into. When we talk from a usability perspective about managing the complexity, it’s also about thinking about the individual persona or how the end-user really needs to interact to get the work done, how they can learn, and how they can use their different devices to work where they want and how they want.

Gardner: It seems to me that among the technology leaps that we are making in order to accommodate this balance is there a greater reliance on the network, network-centric attributes -- intelligence driven into the network. How do you view the role of the network in this balance?

Haydon: I think it’s fundamental, and we're definitely seeing it almost as a tipping point. It’s no longer just about the transactions, but about the trusted relationships. It’s about visibility into the extended value chain, whether that value chain is supply chain, financial payment chain, or logistics chain. It doesn’t matter what that process change or that value change is. It is insight into that trusted community, so you understand that it’s secure, that it’s scalable, and also that reliable and repeatable.
It’s no longer just about the transactions, but about the trusted relationships.

Gardner: It seems like we can put the word "hybrid" in front of so much these days. Tell us a little bit about why SAP HANA is so important to this network services tipping point. Many people think of HANA as a big data platform, but it’s quite a bit more.

Haydon: Yeah, it is. In Ariba we've made strides on leveraging the HANA Technology, first with the Spend Visibility program. The great message about HANA is that it's not HANA for technology sake; it’s how HANA enables different business outcomes. That's the exciting thing. Whether it's on the Ariba Network, whether we start in our analytical platform and have an average of 50X or 80X average improvement in terms of some of the reports, that’s great.

What was really interesting when we put HANA on to our Spend Visibility was that we got more users doing different types of reports because they could do this, they could iterate, they could change, they could experiment in a more interactive and faster way. We saw upticks in the behavior of how customers use their products, and that's the excitement of HANA.

Taking it to the next step, as we looked upon HANA across our network and our other applications in terms of better and different types of reporting in terms of the network and having real-time visibility in insights from our trusted community, it’s just going to provide a differential level of value to any of the end-users, whether they're buyer, seller or any of our partners.

Wider diversity

Gardner: So we have a wider diversity of network participants. We need to connect them. We’re leveraging the network to do that. We're leveraging the ability of a strong platform like HANA to give us analytics and other strong value adds, but we also need to bring that single platform, that single pane of glass value, to the mobile device.

User experience seems to be super important. Tell us a little bit about where you’re heading with that and introduce us to SAP Fiori.

Haydon: It’s a massive focus for us from an innovation perspective.

When we think about our user experience, it's not just about the user interface, albeit a very important part, but it's also the total experience that an end-user or a company has with the Ariba Suite and Business Network.

Fiori is an excellent user-interface design paradigm that SAP has led, and we have adopted, Fiori elements and design paradigms within our applications, mobile applications as well as desktop applications.

You will see a vastly updated user interface, based on Fiori design principles, coming out in the summer, and we'll be announcing that here at Ariba LIVE and taking customers through some really interesting demos. But, as you mentioned earlier, it's not just about the user experience. It's really about end users; we call them personas from a product perspective. You're in accounts payable or you're a purchasing officer. That’s the hat you wear.
It really is about how you link, where you work, work anywhere, embracing modern design principles and learning across the whole user experience.

It really is about how you link, where you work, work anywhere, embracing modern design principles and learning across the whole user experience. We've got some interesting approaches for our mobile device. Let me talk about the crossover there.

We're launching and showing a new mobile app. We launched our mobile app early this year for Ariba’s Procurement suite. I had some great uptick the first week, when 20 percent of our customers activated and rolled it out. Some of their end-users are progressively scaling that. Again, that's the power of a mobile-app delivery. It shows the untapped demand, the untapped potential, of how end-users do, can, and want to interact with business applications today.

At Ariba LIVE 2015, we are also announcing a brand-new application to enable shopping cart, adding, searching for the casual ad hoc end-user, so they can do their requisitioning and their owning of the contract items or ad hoc items wherever they are.

To finish off, just as excitingly, we're really looking to leverage the mobile device and take its abilities to create new user experience design paradigms. Let me give you an example of what that means. Let’s just say you're an accounts payable clerk and you're a very conscientious accounts payable clerk. You're on the bus, on the way to work, and you know you have got a lot of invoices to process. For example, you might want to say you need to process an invoice from ACME Inc. before you do it for my next supplier.

On your mobile device, you can’t process detailed information about an invoice, but you can certainly put it in your queue, and when you get to your desktop, there it is at the top of your to-do queue.

Then, when you finish work, maybe you want to push a report on "How did I do today?" You did x things, you did y things, and you have that on your mobile device on the train on the way home. That's the kind of continuity construct that would bring you in, making the user experience about learning and about working where you are.

Behavioral aspect

Gardner: Before we go into the list of things that you're doing for 2015, let's tie this discussion at the high level about the networked economy, power network, and intelligence driven in the network, the user interface, with this all-important behavioral aspect of users wanting to use these technologies.

One of the things that’s been interesting for me at Ariba LIVE is that I'm learning that user productivity is the go-to market. The pull of users that say they want these apps, they don't want the old-fashioned way, they want to be able to do some work on the train ride home and have notifications that allow them to push a business process forward or send it back.

So how do you see the future of the total technology mix coming to bear on that user productivity in such a way that they're actually going to demand these capabilities from their employers?

Haydon: It's interesting. Let's just use the example of a Chief Procurement Officer. As Chief Procurement Officer, you may have the old classic standard benefits of the total cost of ownership (TCO), cost reduction, and price reductions. But more and more, Chief Procurement Officers also realize that they have internal customers, their end-users.
If the end users can't adopt the systems and comply with the systems, what's the point?

If the end users can't adopt the systems and comply with the systems, what's the point? So, just getting to your point, it was an excellent thing. We're seeing the pull or the push, depending on your point of view, straight from the end user, straight through to the end-of -line outcome.

From an Ariba perspective, how this all comes together really is a couple things. User design interactions are foremost in our design thinking approaches. These different user design interactions make products do different things and work together. It also has some great impact on our platform, and this is where with SAP and HANA Cloud Platform gives us a differential way to address these problems.

One of these aspects here is to keep up with these demands not necessarily out of left field, but out of specific market or industry requirements.

We need to make sure that we can expand our ecosystem from an Ariba perspective to encompass partners and even customers doing their own things with our platform that we don't even know about. For some specific investments with HANA and the HANA Cloud Platform it's to make our network more open and we're also looking at some targeted extensibility scenarios for real applications.

Gardner: Let's go to the road map for 2015 Ariba products. Let's start with Spend Management. What's going on there?

A lot of innovations

Haydon: In 2014, we brought more than 330 odd significant features to market, almost one a day. So we have delivered a lot of innovation.

About 89 percent of those were delivered -- and this is important to our ongoing roadmap because we're cloud -- because we work with our customers in their own on-demand environment. They entrust their business processes to us. We're delivering more and more features in toggle mode -- or configured on or configured off. We're letting our end users and our customers consume our innovation even though it's intrinsic to the product.

That's one big improvement we made in 2014 and we want to carry through in 2015. In terms of spend management, again, we have some great new investment in Ariba. SAP continues to invest in Ariba, and we continue to turn out more innovation.

We have some innovation from enhancing capabilities to support the public sector. We're adding and extending in globalization capabilities. We're adding specific functionality to improve the security, the encryption, of applications.
We have 16-odd years of transactional history on the Ariba Network. We look at that in conjunction with our customers.

Then, there are some more targeted features, whether it's improving demand aggregation for our procurement applications, supporting large line levels and outsourcing and contract management applications, or improving our catalog searching capabilities with type-ahead and improved content and publishing management. It's really end to end.

Gardner: There are sort of four buckets within the spend management, indirect, contingent labor, direct, and supply chain management issues. The new big one was the Concur acquisition, travel and expense. Anything new to offer on understanding better spend management, better spend visibility, across these buckets?

Haydon: Of course. When we work with our customers, we have 16-odd years of transactional history on the Ariba Network. We look at that in conjunction with our customers. We see these big four major spend segments, indirect and MRO, as you mentioned, supply chain indirect, services, contingent labor, travel and expense, and, of course, the distribution of that spend type changes per industry.

But what we're really focused on is making sure that we can get end-to-end outcomes for our customers across the source-to-pay process. I'll touch on all of them in turn.

In indirect MRO we're just continuing to drive deeper. We really want to address specific features in terms of compliance and greater spend categories, specifically with Spot Buy, which is a product we are out there trialing with a number of customers right now.

In contingent labor and services management, we've done some excellent work integrating the Ariba platform with the Fieldglass platform, made some huge strides in linking purchase orders into the Fieldglass platform. Let Fieldglass do what they do great. They're the number one market leader in bringing the invoices back to the network over the common adapter.

In terms of direct and logistics and supply chain, we brought to market, like we mentioned last year, some direct materials supply-chain capability, co-innovating with a number of customers right now. We added subcontracting purchase order (PO) for complex scenarios in the summer and have done some great work in extending the capability to support consumer package and retail supplies.

Interesting strides

We've done some really interesting strides, and again, expanding the spend categories that we can support on there.

And last but not least, Concur. It's number one in travel, and we're excited to have that part of the family. Again, from an SAP perspective, when you look at total spend, there's just an unparalleled capability to manage any spend segment. We're working pretty closely with Concur to ensure we have tied integration and we work at how we can leverage their invoicing capability as a complement to Ariba's.

Gardner: Line-of-business applications is one of the things that's intrigued me here. Hearing your story unfold is this "no middleware, yet expansive integration -- end to end integration across business processes and data."
A resounding message from our customers . . . is that we need seamless, simpler integration between our cloud applications and our current applications.

So in this line-of-business category, explain to me how you can be so inclusive leveraging the technology. How does that work?

Haydon: Let me unpack that a little bit. A resounding message from our customers, particularly since the acquisition, is that we need seamless, simpler integration between our cloud applications and our current applications. Would they be on-premise?

I'll talk about Oracle and other clients in a little bit, but specifically for our SAP ERP systems, we’ve really worked hand in glove with our on-premise business-suite partners to understand how we can move from integrate to activate.

And so what we brought to market pretty significantly with the business suite is the ability for any SAP Business Suite customer to download an add-on that basically gives them an out-of-the-box connectivity to the Ariba Network. We continue to invest in that with S/4HANA upcoming, where we are planning to have native connectivity to the Ariba Network as part of a standard feature of S/4HANA.

For our other customers, the Oracle customers and other major ERP systems out there, we continue to invest in open adapters to enable their procurement and finance processes across the network or with any of our cloud applications.

Gardner: There's something that's always important. We leave it to the end, but we probably shouldn't -- risk management. It seems to me that you're building more inherent risk-management features inside these applications and processes. It's another function of the technology. When you have great network-centric capabilities and a solid single platform to work from, you can start to do this. Tell us a little bit more about that.

Emerging area

Haydon: This is a really exciting and emerging area. More and more leading-practice companies are starting to manage their procurement and their supply chains from a risk basis, the risk, the continuity of supply, security of supply. What happens if x, what happens if y? You eye your supply chain. If there is, heaven forbid, some contamination or whatever traceability issue somewhere in your supply chain, and you're a large company or even a small company, now you're held accountable.

How do we start helping companies understand the risk that exists within their supply chain? We think that the business network is the best way to make sense of the risk that exists in your supply chain. Why?

One, because it's a connected community; and two, because you think about the premise. We already have the transactions, 750 billion plus to spend. We already have a million plus trusted, connected relationships. But that's the first step.

We also think about where we can have differential inputs, third-party inputs, on types of dimensions, and we think it's these risk dimensions or domains of information that matter, whether it's safety, performance, innovation, diversity, environment, or financial risk. It could be any of these domains, whether it's information from Dun and Bradstreet, information from Made In A Free World, which has a global slavery index. Whatever these dimensions of information are, we want to bring them in to our applications in the context of the transaction, in the context of the end-user.

Imagine when you do a sourcing event if you could be notified of some disruption or some type of risk in your supply chain before you finally award that sourcing event or before you finally sign the contract. That provides a differential level of outcome that can only really be delivered through a business network in a community.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

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Thursday, April 30, 2015

How Globe Testing helps startups make the leap to cloud- and mobile-first development

This latest BriefingsDirect mobile development innovation discussion examines how Globe Testing, based in Madrid, helps startups make the leap to cloud-first and mobile-first software development.

We'll explore how Globe Testing pushes the envelope on Agile development and applications development management using HP tools and platforms.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy.

To learn more about modern software testing as a service we're joined by Jose Aracil, CEO of Globe Testing, based in the company's Berlin office. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Tell us about Globe Testing. Are you strictly a testing organization? Do you do anything else? And how long have you been in existence?

Aracil
Aracil: We're a testing organization, and our services are around the Application Development Management (ADM) portfolio for HP Software. We work with tools such as HP LoadRunner, HP Quality Center, HP Diagnostics, and so on. We've been around for four years now, although most of our employees actually come from either HP Software or, back in the day, from Mercury Interactive. So, you could say that we're the real experts in this arena.

Gardner: Jose, what are the big issues facing software developers today? Obviously, speed has always been an issue and working quality into the process from start to finish has always been important, but is there anything particularly new or pressing about today's market when it comes to software development?

Scalability is key

Aracil: Scalability is a big issue. These days, most of the cloud providers would say that they can easily scale your instances, but for startups there are some hidden costs. If you're not coding properly, if your code is not properly optimized, the app might be able to scale -- but that’s going to have a huge impact on your books.

Therefore, the return on investment (ROI) when you're looking at HP Software is very clear. You work with the toolset. You have proper services, such as Globe Testing. You optimize your applications. And that’s going to make them cheaper to run in the long term.
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There are also things such as response time. Customers are very impatient. The old rule was that websites shouldn't take more than three seconds to load, but these days it's one second. If it's not instant, you just go and look for a different website. So response time is also something that is very worrying for our customers.

Gardner: So it sounds like cloud-first. We're talking about high scale, availability, and performance, but not being able to anticipate what that high scale might be in any given time. Therefore, creating a test environment, where you can make the assumption that cloud performance is going to be required and test against it, becomes all more important.

Aracil: Definitely. You need to look at performance in two ways. The first one is before the app goes into production in your environment. You need to be able to optimize the code there and make sure that your code is working properly and that the performance is up to your standard. Then, you need to run a number of simulations to see how the application is going to scale.

You might not reach the final numbers, and obviously it's very expensive to have those staging environments. You might not want to test with large numbers of users, but at least you need to know how the app behaves whenever you increase the load by 20 percent, 50 percent, and so on.
The second aspect that you need to be looking at is when the app is in production. You can't just go into production and forget about the app.

The second aspect that you need to be looking at is when the app is in production. You can't just go into production and forget about the app. You need to carry on monitoring that app, make sure that you anticipate problems, and know about those problems before your end users call to tell you that your app is not up and running.

For both situations HP Software has different tools. You can count on HP Performance Center and HP Diagnostics when you're in preproduction in your staging environment. Once you go live, you have different toolsets such as AppPulse, for example, which can monitor your application constantly. It's available as software as a service (SaaS). So it's very well-suited for new startups that are coming out every day with very interesting pricing models.

Gardner: You're based in Berlin, and that's a hotbed of startup activity in Europe. Tell us what else is important to startups. I have to imagine that mobile and being ready to produce an application that can run in a variety of mobile environments is important, too.

Mobile is hot

Aracil: Definitely. Mobile is very hot right now in Berlin. Most of the startups we talk to are facing the same issue, which is compatibility. They all want to support every single platform available. We're not only talking about mobile and tablet devices, but we're also talking about the smart TVs and the wide array of systems that now should support the different applications that they're developing.

So being able to test on multiple operating systems and platforms and being able to automate as much as possible is very important for them. They need the tools that are very flexible and that can handle any given protocol. Again, HP Software, with things such as Unified Functional Testing (UFT), can help them.

Mobile Center, which was just released from HP Software, is also very interesting for startups and large enterprise as well, because we're seeing the same need there. Banking, for example, an industry which is usually very stable and very slow paced is also adopting mobile very quickly. Everyone wants to check their bank accounts online using their iPad, iPhone, or Android tablets and phones, and it needs to work on all of those.
Most of the startups we talk to are facing the same issue, which is compatibility. They all want to support every single platform available.

Gardner: Now going to those enterprise customers, they're concerned about mobile of course, but they're also now more-and-more concerned about DevOps and being able to tighten the relationship between their operating environment and their test and development organizations. How do some of these tools and approaches, particularly using testing as a service, come to bear on helping organizations become better at DevOps?

Aracil: DevOps is a very hot word these days. HP has come a long way. They're producing lots of innovation, especially with the latest releases. They not only need to take care of the testers like in the old days with manual testing, automation, and test management. Now, you need to make sure that whatever assets you're developing on pre-production can then be reused when you go in production.
Reduce post-production issues by 80 percent
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Build applications that meet business requirements
Just to give you an example, with HP LoadRunner, the same scripts can be run in production to make sure that the system is still up and running. That also tightens the relationship between your Dev team and your Operations team. They work together much more than they used to.

Gardner: Okay, looking increasingly at performance and testing and development in general as a service, how are these organizations, both the startups and the enterprises, adapting to that? A lot of times cloud was attractive early to developers, they could fire up environments, virtualize environments, use them, shut them down, and be flexible. But what about the testing for your organization? Do you rely on the cloud entirely and how do you see that progressing?

Aracil: To give you an example, customers want their applications tested in the same way as real users would access them, which means they are accessing them from the Internet. So it's not valid to test their applications from inside the data center. You need to use the cloud. You need to access them from multiple locations. The old testing strategy isn't valid any more.

For us, Globe Testing as a Service is very important. Right now, we're providing customers with teams that are geographically distributed. They can do things such as test automation remotely, and that can then be sent to the customers so they are tested locally, and things such as performance testing, which is run directly from the cloud in the same way as users will do.

And you can choose multiple locations, even simulating the kind of connections that these users are using. So you can simulate a 3G connection, a Wi-Fi connection, and the like.

Other trends

Gardner: I suppose other trends we're seeing are rapid iterations and microservices. The use of  application programming interfaces (APIs) is increasing. All of these, I think, are conducive to to a cloud testing environment, so that you could be rapid and bring in services. How is that working? How do you see your customers, and maybe you can provide some examples to illustrate this, working toward cloud-first, mobile-first and these more rapid innovations; even microservices?

Aracil: In the old days, most of the testing was done from an end-to-end perspective. You would run a test case that was heavily focused on the front end, and that would run the end-to-end case. These days, for these kinds of customers that you mentioned we're focusing on these services. We need to be able to develop some of the scripts before the end services are up and running, in which case things such as Service Virtualization from HP Software are very useful as well.

For example, one of our customers is Ticketmaster, a large online retailer. They sell tickets for concerts. Whenever there's a big gig happening in town, whenever one of these large bands is showing up, tickets run out extremely quickly.

Their platform goes from an average of hundreds of users a day to all of a sudden thousands of users in a very short period of time. They need to be able to scale very quickly to cope with that load. For that, we need to test from the cloud and we need to test constantly on each one of those little microservices to make sure that everything is going to scale properly. For that, HP LoadRunner is the tool that we chose.
We need to be able to develop some of the scripts before the end services are up and running.

Gardner: Do you have any examples of companies that are doing Application Development Management (ADM), that is to say more of an inclusive complete application lifecycle approach? Are they thinking about this holistically, making it a core competency for them? How does that help them? Is there an economic benefit, in addition to some of these technical benefits, when you adopt a full lifecycle approach to development, test, and deployment?

Aracil: To give you an example of economic benefit, we did a project for a very large startup, where all their systems were cloud-based. We basically used HP LoadRunner and HP Diagnostics to look at the code and try to optimize it in conjunction with their development team. By optimizing that code, they reduced the amount of cloud instances required by one-third, which means a 33 percent savings on their monthly bill. That’s straight savings, very important.

Another example is large telecommunication company in Switzerland. Sometimes we focus not only on the benefits for IT, but also the people that they are actually using those services. For example those guys that go to their retail shops to get a new iPhone or to activate a new contract.
Reduce post-production issues by 80 percent
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Build applications that meet business requirements
If the systems are not fast enough, sometimes you will see queues of people, which turns into lower sales. If you optimize those systems, that means that the agents are going to be able to process contracts much quicker. This specific example will reduce to one-fifth of the time by using Performance Center. That means that the following Christmas, queues literally disappear from all those retail shops. That turns into higher sales for the customer.

Gardner: Jose, what about the future? What is of interest to you as a HP partner? You mentioned the mobile test products and services. Is there anything else particularly of interest, or anything on the big data side that you can bring to bear on development or help developers make better use of analytics?

Big data

Aracil: There are a number of innovations that are coming out this year that  are extremely interesting to us. These are things such as HP AppPulse Mobile, StormRunner, both are new tools and they are very innovative.

When it comes to big data, I'm very excited to see the next releases in the ALM suite from HP, because I think they will make a very big use of big data, and obviously they will try to get all the information, all the data that testers are entering into the application from requirements. The predictive test and the traceability will be much better handled by this kind of big data system. I think we will need to wait a few more months, but there are some new innovations coming out in that area as well.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy. Sponsor: HP.

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Tuesday, April 28, 2015

Big data detects and eradicates slavery risks from across B2B supply chains

Business networks and big data are joining to give companies new means to identify and eliminate slavery and other labor risks from across their complex global supply chains.

Data-savvy B2B participants in these networks can now newly uncover unsavory and illegal labor practices that may be hidden deep inside multi-level supplier ecosystems.

The next BriefingsDirect best business practices panel discussion focuses on how Made in a Free World, a nonprofit group in San Francisco, is partnering with Ariba, an SAP company, to shine more light across the supply chain networks to not only stem these labor practices, but also reduce the risks that companies may unwittingly incur from within their own pool of buying.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy.

To explain practical and effective approaches to forced-labor risk determination and mitigation, we're joined by Tim Minahan, Senior Vice President of Ariba, and Justin Dillon, CEO and Founder at Made In A Free World in San Francisco. The panel is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Dillon: I learned about this slavery issue about 10 years ago, just reading an article in The New York Times, and really wanted to figure out a way to get more people involved. That led to Made In A Free World, a nonprofit organization that was started just few years ago.

Dillon
We began with consumers, just everyday individuals getting involved and being able to leverage their own network, their personal networks. That's now graduated into figuring out how to get businesses to leverage their own networks.

Gardner: What is the problem we are talking about? Is this just slavery? Is this breaking the law in terms of other labor regulations?

Dillon: We define slavery as anyone who is being forced to work without pay under threat of violence, being economically exploited and unable to walk away. There are over 30 million people who fall under that definition today. In some cases, these people find themselves in the sex industry, but in most cases, they're in informal sectors, agricultural or service industries, much of which is finding its way into supply chains.

Part of what we believe is that we have to find a way to be able to connect the dots and figure out how we can use the systems that currently exist to protect the world's most vulnerable resource.

Gardner: Tim, why is this becoming such an important issue now for nearly any business?

Minahan: Over the past decade, as companies begin to outsource more processes and manufacturing and assembly to low-cost regions, they've really looked to drive costs down. Unfortunately, what they haven't done is really take a close look at their sub-tier supply chain.

Minahan
So they might have outsourced a process, but they didn't outsource accountability for the fact that there may be forced labor in their suppliers' suppliers. That's a real issue, getting that transparency into that problem, understanding whether there's a potential risk for the threat of forced labor in a sub-tier supply chain.

Gardner: How big of a problem is this in terms of scope, depth and prevalence? Is this something that happens from time to time in rare instances or is this perhaps something that's quite a bit more common than most people think?

Minahan: Dana, this is far more pervasive than most people think. Slavery really has no boundaries. There are incidences of forced labor in all industries, from conflict minerals in the Congo to fishing in Malaysia to, unfortunately, migrant workers right here in the United States.

Palm oil problem

Dillon: It's really not a problem that “exists over there." Just one statistic alone: By 2020, half of all the products you can purchase in a grocery store will have a commodity, palm oil, which has a huge incidence of forced labor, particularly around the Malaysia region and Indonesia.

This small commodity, mostly because it's so easy to pick and harvest, is now finding its way into a myriad of products -- and that's just in agriculture.

Gardner: Why should companies be concerned? Isn’t that someone else's issue, if it’s below the level of their immediate reach?

Minahan: You can certainly outsource process or manufacturing, but you can’t really outsource accountability. Secondly, there is a big movement afoot from regulators, both here in the United States, Federal laws, California state laws, as well as overseas in the UK to hold companies accountable, not just for their first-tier supply chain, but for their sub-tier supply chain.

Gardner: And, Justin, of course visibility being so prominent now -- a camera around every corner, social media -- people can easily react and irreparable damage to a company's reputation. Do you have any examples of where this has come to bear, where not knowing what's going on within your supply chain can be such an issue economically and otherwise?
You can certainly outsource process or manufacturing, but you can’t really outsource accountability.

Dillon: Well, people love to hate the ones they love. So everyone is complaining about Apple products, while they're using their Apple iPhone. But in a recent article in The New York Times, one of the supply-chain folks for Apple said that the days of sloppy globalization is over and they're taking this quite seriously. I would argue that some Apple's work is some of the most innovative human rights work that we've seen.

They've dug deeper down into the sub-tier suppliers and, if their reputation as innovators has anything to do with their products, it certainly has to do with their supply chain as well. They are a great example of a company who sees these challenges, sees the connection to not only their brand, but also to their products and they're taking some remediation work against it.

Gardner: Okay, we understand the depth of the issue and why it’s important. Now, now how do we do get the tools to combat this effectively? What have you done? I understand you have a database, and it’s ongoing. Tell me a little bit about the tools that you’re bringing to bear to solve this problem and to help companies take better accountability.

Dillon: The most important thing to do first is to realize that we aren't operating in the 1990s anymore, in the sweatshop era. That was an era that where we found problems in supply chains and we started to build solutions around that, auditing, monitoring, all the rest of that. That was 25 years ago.

Era of big data

We're now in the 21st Century, in the era of big data, and we need to be able to use those tools to be able to combat 21st Century problems. For us as an organization, we've realized this was a space where we could be helpful to business. Our mission is to use the free market to free people. That’s what we do as an organization.

We've realized that there is a lot of data missing, and there is a lot of synthesis of data missing. So we, as an organization, decided to pull together the bible of databases, when it comes to supply chains, the UNSPSC. Then, we built off of that taxonomy a risk analysis on every single thing good, service, or commodity that can be bought or sold. That becomes the lingua franca, so to speak, when it comes to supply chain, risk management.

Gardner: How does it work? When a company comes in and gives you information about who their suppliers are, how do you come up with inference, insight and some sort of a predictive capability that identifies the risk or the probability that they could be in trouble?

Dillon: We are using all the best databases that currently exist on the issue. Everything from forced-labor databases to child-labor databases to rule-of-law, governance, migration, trade flows. All of that is synthesized into an algorithm that can be applied to any individual’s spend data. You're able to get a dashboard on all that spend, which gives you some optics into your sub-tier suppliers, which is where we need the optics. It’s not a crystal ball, but it’s the next best thing.

That database and analysis are now available to anyone, any size, any sector, to leverage their influence to the extent that they can. We've recognized that you can't be everywhere at all times but you’re somewhere at some times and that's the place we feel like any company can make the greatest influence.

Gardner: Now, Tim, the labor issues that we’re talking about are certainly a risk issue, but at the same time, we’re looking to find more ways to automate and make visible other types of risk, any kind of risk, in the supply chain in procurement, buy-and-sell environment.
That database and analysis are now available to anyone, any size, any sector, to leverage their influence to the extent that they can.

Tell us a little bit about how this particular risk fits into a larger risk category, and then how the databases for each of them, or many of them, come together for a whole greater than the sum of the parts.

Minahan: As Justin said, the information here is shining a light on a particular issue, being able to mass, for the very first time, data points from hundreds of different data sources around the world to predict and project the threat of forced labor.

Extending that further, that's one risk indicator that companies need to manage. Companies are managing a whole host of sustainability issues around social and eco-responsibility, but also financial risk, and threat of disruption risk.

Being able to pull all those together into a common risk factor is what we're attempting to do through the power of business networks. By connecting the world’s businesses and connecting their supply chains and automating their processes, that was phase one.

Phase two is harnessing all the information from all of those interactions to provide a better level of visibility that raises that transparency for everyone. Then, you can predict future risk. Being able to tap into what Made In A Free World has done in this particular area, pull that into the network, and expose that as another risk factor that companies can evaluate is a very powerful opportunity for us together.

Gardner: As we've seen in other aspects of the networked economy, the better the data, the more influence, the more action as a result of that data, that encourages more people to see value and add more data back into the pool and so on and so forth. Tell us about the news you made in April at the Ariba LIVE conference and how that works into this notion of a virtuous adoption cycle.

New partnership

Minahan: Ariba and Made In A Free World announced a new partnership to bring the power of the Made In A Free World database together for predictive analytics of forced labor with the power of the Ariba toolset and the Ariba Network to help the Global 2000 and beyond be able to have the transparency they need to identify potential risk, in this case, of forced labor and their supply chain, and be able to take action and rectify it.

Gardner: Justin, how do you see this announcement benefiting your cause?

Dillon: Well, it moves us past the point of saying there is nothing that you can do as a company. That is no longer an option on the table. What you're going to do is the next question. We have removed the word "if" in this conversation -- and we couldn’t have done that without Ariba.

And we can see how the Ariba Network is going to be helpful, because companies are coming to us and coming at the federal government saying, "What are we supposed to do? How do we move forward? This seems like a huge problem." They're right, and the solution is right in front of them.

Gardner: Tim, for organizations that are now more aware of this problem, and of the general risk issue across supply chains, how do they start? Where do they go to begin the process for getting better control that allows them to have better accountability?

Minahan: That’s exactly what Ariba and Made In A Free World are trying to do --  provide the tools necessary for companies to get started. We mentioned together the technical solution that we 're bringing to bear to allow folks within the Ariba community to be able to access the Made In A Free World input and be able to project potential issues of forced labor in their supply chain.

Together, through that effort, we've developed a playbook that provides suggested guidelines for folks to get started. You can’t fix what you don’t know about. You can’t improve without having some understanding of where you fit in the mix. We believe that data and doing an analysis on the freedom platform is the best way for a company to get started.

We think it’s the best synthesis of practices, data, influence, and the network effect that anyone can begin to take. We suggest that they start to look at their own risk based on what they are buying and based on their own exposure. Every company that comes to us, we're able to do this risk analysis with them, and they're are getting new insights.

In addition, there is a whole ecosystem of companies that are really looking at this issue hard. The thing that’s most exciting about it is that everyone is very transparent and they're willing to share. So you have companies from Patagonia to Apple and the like that are sharing their practices freely, because this is an issue that we want to address. The business world has the opportunity to address probably the most serious issue facing us today, and that is modern slavery.

Learning more

We have every expectation that our partnership with Ariba is going to improve this tool, not just for us, but for the planet.
Gardner: It strikes me that this is a game of numbers. If enough companies examine their supply chain sufficiently and then eradicate the areas where there is trouble, the almighty Dollar, Peso, or what currency it may be, comes to bear, and things like corruption don’t work and bad labor practices don’t get supported. Is this a rolling-thunder sort of thing. If so, what’s the timeframe? Is this something that can be solved in a fairly short amount of time if people actually come together and work on it?

Dillon: To me, it’s the greatest story ever told. This is the thing that we all appreciate, and frankly we all benefit from it. We're all benefiting from a free market and the way that we look at change in our organization is that we say that change is more about judo than karate. How can we use the force against itself to actually change it, and the marketplace is the way to do that.

So yes, this can move quite quickly. In my opinion, it's much quicker than governments can move. We think that they're going to be followers in this case and we highly expect them to be followers.

Gardner: Tim, if companies do this right, if they leverage big data, if they examine risk properly, what do they get, other than of course the direct reduction of that particular risk? It strikes me that we are not just tackling risk, but we're putting into place systematic ability to manage risk over time, which is way more powerful. Is that what we're going to get?

Looking at risk

Minahan: Absolutely. Companies are looking at risk holistically, and this is one key vital input into that. As they continue to address that and, as Justin said, we're using free markets as a powerful lever to free people. They can, through their buying patterns and their buying policies, begin to adjust the market, shine a light not just on their own supply chain but change the sub-tier supply chain practices to make sure that there is fair labor. It becomes unappealing to have forced labor and it becomes a detriment to their ability to win new business by doing that.

That's really what the power of data and the power of business networks can deliver in this scenario.

Dillon: Businesses are the heroes in the story. It's not the non-profit, and it’s not government. Anytime you associate business with human rights, businesses are often qualified as Darth Vader who actually think that they are Luke Skywalker in the story. And for us an Ariba, I don’t need to put that on them, but we are just Yoda.

We're giving them the tools that they need to fight the evil empire and we are going to do it together and celebrate it together. But this is one thing that we'll have to do in concert. We all have individual roles to play, and business has a very clear, distinct role to play.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS or Android. Read a full transcript or download a copy. Sponsor: Ariba, an SAP company.

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