Winning the B2B commerce game: What sales organizations should do differently

The next BriefingsDirect thought-leader interview focuses on what winning sales organizations do to separate themselves from the competition by creating market advantage through improved user experiences and better information services.

We'll hear from RAIN Group about a recent study on sales that uncovers what sales leaders do differently to foster loyalty and gain repeat business.

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

And we'll also hear from National Business Furniture on how they're leveraging online business networks to enable more collaborative and innovative processes that enhance their relationships, improve customer satisfaction, and boost sales.

Please join our guests, Mike Schultz, President of RAIN Group, based in Framingham, Mass., and Brady Seiberlich, IT e-Procurement and Development Manager at National Business Furniture, based in Milwaukee. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: What's changing the B2B sales dynamic? What can we do about it?

Schultz: It's really interesting. In the world of sales, if you fell asleep in 1982, having just read a sales book, and woke up 30-something years later and in 2005 went back to work, you didn't miss anything. It didn't really change that much.

Schultz

But there are a couple of things that have been happening in the last 10 years or so that have been making sales a lot different. It has changed more in the last 10 years than it did in the previous 40. So let’s look at two of the things.

The first one is that buyers perceive the offerings that different companies bring to them to be somewhat similar, somewhat interchangeable. What that means is that the sellers are no longer competing on saying, "Hey, here is the product, here is the service, and here's the benefit it’s going to get for you," because the other guy has something that the buyer perceives to be the same.

What they're actually competing on now is how to use and how to apply those services and products so the company actually gets the greatest benefit from them. That’s not actually the power of the offering; that is the power of the ideas, the innovation, and the collaboration that the sellers are bringing to the table. So there's one thing.

The other thing is the asymmetry of information has been changing. It used to be very asymmetrical, because the buyer had all the need and all the desire, but the seller had all the knowledge. Now, buyers can hop online and talk to user groups who have bought from you and see what everyone says about your pricing, and they can find your competitors really quickly. They can get a lot more information.

So there has been a leveling of the playing field, which brings us back to point number one. If the sellers want to compete, they have to be smarter than the average bear, smarter than they used to be. They used to be able to just take orders; they can't do that anymore and still win.

Gardner: Brady, is that what you're facing? What do you do differently about this new sales dynamic?

Seiberlich

Seiberlich: I definitely agree with Mike. In the last couple of years, buyers are getting smarter. They're trying to challenge us more. With the Internet, they have the ability to easily price compare, shop products, look at product reviews. They're so much more knowledgeable now.

Another thing that we found with our buyers is that they want the ordering process to be as easy as possible, whether it's through the Internet or an e-procurement system. You have to work a lot harder to make sure the buyer finds you as the easiest way to order.

We've really had to work hard at that and we've had to be able to adjust, because every buyer has needs and they all have different needs. We want to make sure we can cover as many different needs without doing a user experience customization for everybody.

The experience is important

Gardner: It sounds as if the experience of buying and procuring is as important as what you're buying.

Schultz: That’s actually what we found from our research. I said that sales has changed in the last 10 years more than it's changed in the last 40. Yet our industry is very sleepy. Most people do the same thing in terms of what they profess to be what's important, to a whole bunch of people saying a whole bunch of different things. It goes all the way up to the Harvard Business Review saying that solution sales is at its end.

They published an article, The End of Solution Sales, and they published an article, Selling Is Not About Relationships. So is this true? What's actually going on?

We did the study where we looked at 700 business-to-business (B2) purchases from buyers who represented $3.1 billion of purchasing power. We wanted to find out what was the buyer's experience like from the seller they awarded the business to, to the seller that came in almost there, but came in second place. When you sell, person in first place gets the trip to Aruba, and the second place person gets the trip back to their office.

Sellers that win don’t just sell differently; they sell radically differently than the sellers that even come in the closest second place.

What we found first of all, is that the sellers that win don’t just sell differently; they sell radically differently than the sellers that come in the closest second place. [Get a free copy of the RAIN Group report, What Sales Winners Do Differently.]

The product and service playing field was perceived to be that the buyer is similar, especially by the time they get to the last two. Maybe they kicked out some lesser providers early, and when they get down to the end, both providers provide the technology, they can both engineer the playing field that we're building, and they can both do the thing that we need them to do.

It actually came down to the buyer experience with the seller and how the seller treated the buyer. What they did with the buyer were the tipping points for why they got awarded the business.

Gardner: Brady, what has changed in terms of your creating a better experience, a simple, direct, maybe even informative process for your customers? How do you accommodate what we have been talking about in terms of improved experience?

Flexible as possible

Seiberlich: We try to be as flexible as possible and we try to provide them with as much information as possible.

Information is huge for us. Back in the days when we first started, we mailed catalogs. For each piece of our furniture that we sell, you probably saw in the catalog seven pieces of information: how big it was, how much it weighed, what colors it came in.

Right now, for every piece of furniture we have, we hold over a 100 pieces of information on it and we display a lot of that on the web. It's an ergonomic chair, it’s leather, it raises up and down, it comes with or without arm, things like that. We try to provide as much information, because the shopper works harder.

In the days of a catalog, where you had a catalog at your desk and you opened it up, there was no competition there. On the web, there's plenty of competition and everybody is trying to compete for that same dollar.

We try to be as flexible as possible and we try to provide them with as much information as possible.

We want to make the customer as informed as possible. The customer doesn’t want to necessarily have to call us and say, "Is this brown; how dark is this brown?" We want to give them as much information as possible and inform them, because they want to make the decision themselves and be done with it. We're trying to get better at that.

Gardner: I believe you are in your 40th year now at National Business Furniture. Tell us a little about your company: your scale, where you do business, and what it is precisely that you are selling?

Seiberlich: That is correct. This year we are celebrating our 40th anniversary, which is pretty exciting for us. We sell in the US and in Canada. We opened our first office in Canada a couple of years ago.

The main reason we mainly sell in the US market is because of what we sell. We sell office furniture: desks, chairs, and bookcases. That stuff is too heavy to ship overseas, and we can't compete with some of the vendors that are over there already selling. So we sell here in the US mostly. The majority of our business obviously comes from there.

We started as 100 percent catalog. In the early '90s we made a website that was just for browsing purposes. You couldn't shop off of it. In the late 1990s we added the ability to buy off of it, and right now we're up to about a 50/50 split in what comes through the catalog and what comes through via e-commerce. And in e-commerce, we include the Internet, the e-procurement system, and stuff like that.

So we've proven that we're still adjusting with it, but the weird thing is that some of our product lines haven’t changed that much. Traditional furniture is still traditional furniture. We are selling some very similar products, just 40 years later.

Different approach

Gardner: Given this change in the environment with the emphasis on experience and data, making good choices with a lot of different possible choices, if you're a buyer, what are you doing differently in order to keep your business healthy?

Is this a matter of having more strategic long-term predictable sales? Do you go about marketing in a different way? Have you changed the actual selling process in some fashion? How are you adjusting?

Seiberlich: Probably all of the above. We're always looking for new markets to sell to. We've just started to move into medical furniture and we're doing some new things there.

The government has different rules in buying. So we're tying to make sure that we can adhere to those and make sure that’s an open market for us. And we continue to just try and find better ways to do things. That's what separates us from our competitors.

The days of establishing a relationship and just hoping that will carry you for years have kind of come and gone.

Everyone who sells office furniture is all selling similar products, around the same price. So we have to do something to differentiate ourselves, and we do that. We try to make the process easy, we try to provide the customer with as much information as possible, and we just want to make it a smooth process.

The days of establishing a relationship and just hoping that will carry you for years, like Mike said, have kind of come and gone. So we've got to work harder to keep our existing customers. We're doing that and also trying to find ways to find new customers, too.

Gardner: We are here at Ariba LIVE. We're hearing a lot about business networks, end-to-end processes, using different partners and different suppliers to create a solution within that end-to-end process. What is it about business networks that helps you attain your goals of a smoother data-driven process for sales?

Seiberlich: When you can prove that you can collaborate over these networks, you have a success that you can show to other buyers. You can say, "We've proven we can do this." It shows that you have established yourselves in these different markets.

I'm sure everybody knows that nobody wants to be the guinea pig and try something new with somebody else. But we've proven that we can work on these different markets and different networks and continue to try to find ways to make it easier. That’s what we're really pushing.

Unpacking the term

Schultz: Dana, I wanted to add one quick thing on that. "Network" is one of those interesting words that you can unpack. You can unpack it in the technology sense that things are networked, but there's also the concept of a network that says that on the other side of this technology, there are people.

As a seller what it does, when what you do here isn’t just what you do there, it starts to go out through technology to other people and it amplifies whatever you do.

So, if you're doing a pretty bad job, people are going to hear that it’s a pretty bad job a lot faster than they used to. But if you are doing something interesting, if you are doing something worthwhile, if you are doing something like Brady is talking about, saying, "Wow, this process really used to be a pain and now it's a lot better because of the technology," that will get through to more people.

If you're doing the things that I talked about earlier, if you're selling in ways that help buyers get the most use out of what they you're selling, get the most benefit out of what you're selling, it’s no longer just words in a catalog saying, "This is how you're going to benefit."

If you're doing a pretty bad job, people are going to hear that it’s a pretty bad job a lot faster than they used to.

In some ways, you're going to benefit from working with us to get it, not just from the thing itself. The technology amplifies the good sellers, and they end up selling a lot more because it spreads faster.

Gardner: I suppose another part of the technology impact is convenience. When you're already in an environment, an application, a cloud, a network, maybe even a mobile interface, and the seller is in that same environment, if you are a buyer, that has some positive implications. Things can be integrated. Things can be repeatable. The data can be collected, shared, and analyzed.

Tell me a little bit, if you would, Brady, about being in a shared environment technically that also provides grease to the sales gears?

Seiberlich: It definitely does. We have some customers that we transact with here on Ariba, and in the the first one, two, or three transactions, we had to work through some difficulties, but by transaction 10, 15, or 20, it’s just smooth and it goes right through. And that's what we're trying to push with other customers that buy from us and we are trying to get them moved over to the network.

We have a proven track record here. We are the highest rated furniture provider here. We are gold from the Ariba standpoint. So we're trying to push customers to continue to buy from us off of these networks, because we've proven how simple it can be and we want to continue to do that. We want to make the ordering process as simple as possible.

Transaction algorithm

Gardner: Mike, maybe looking a bit forward, if all things become equal in terms of the product and the information that’s available, if we take that to its fullest extent, it really becomes a transactional efficiency, even down to compressing the payment, schedule, and negotiating vis-à-vis actual transactions on a larger and larger scale. Where do we end up? Do sales go well together and it simply becomes a transaction algorithm?

Schultz: There were predictions about 10 years ago with e-commerce when the information symmetry really started to happen, when it shifted toward buyers. They started to know more that there were going to be fewer salespeople in the US, because of government data, the US economy.

US government data said that 1 out of 9 people working in the United States were in sales; that was in 2000. If you fast forward to now, the massive change has been that there are about 1 in 9 people working in sales. So it hasn’t changed; it’s just that they're not order takers anymore.

The other thing is, is that while things look the same, they still aren't always necessarily the same.

So the new challenge for buyers is to figure out what are the differences.

If you think about it, all this becomes price pressure. If this goes directly to microeconomics, and we are just buying commodity pork bellies, it has to be the exact same price because the elasticity works that way. Any shift is going to make it go to a different provider. That’s really not the case, because we're not all buying pork bellies.

I don’t know about you, but I don’t think that Brady is looking really well. Maybe he needs some heart surgery. I have a really cheap surgeon. Would you like to go see him. He's board-certified, and he is a really cheap heart surgeon? It’s like, oh jeez.

There is a lot of decision process and a lot of mental things built up about what cheap-versus-expensive means, especially because if you are not talking about pork bellies, it's not necessarily the same.

So the new challenge for buyers is to figure out what are the differences. This law firm says they have the same capabilities at that law firm, but in fact, one law firm is better. The question is how. It’s contingent on buyers and sellers to figure that out together.

That’s why for law firms, consulting firms, accounting firms, I can't sink my teeth into them, bite them, and tell you which one is thicker or stronger, or which is going to have a 20-year guarantee versus a 10-year guarantee on the chair. I'm just trying to figure out who is actually better, who can serve me better, and who is the right fit. So it's not all commodities.

One other challenge, if you think about it from the buying side, is that it's not a big secret that heading into the purchasing department is not necessarily the absolute positive I am dying to do a career path for the top MBAs that are coming out of the top schools.

Complicated purchases

There are some great people in purchasing, but a lot of the times, when we're talking to sellers, we're talking to sellers that are doing $5 and $10 million on very complicated things with buyers, and the purchasing person they're working with doesn't actually understand the business context of what they're trying to get done. So they're asking, "How do I actually get to interact with them when the rules are they don't let me talk to them?" This is $7 million. They're buying this like they're buying roofing shingles.

It's going to require much more sophistication from the buyers to figure out what they really need and what are really the quality levels as it is on the sellers to make sure that they bring forth the right ideas, craft the right solutions, and treat the buyers well.

Gardner: So clearly we've hit on that reputation being in an open visible network where information can be traded. That gets to that reputation, trust, and a track record. But it also sounds like we're talking about some sort of value-add to the buy.

And that’s one of our  biggest selling points -- our people. That’s an important thing for us. They have the knowledge that they need and they're not just order takers.

If other things are equal -- but the experience of buying, if making a decision in a complex environment is the case -- something else is needed, perhaps consulting, data, or analysis. So, Brady, what is potentially a value-add in your business to increase your likelihood of making the sale and then keeping that relationship with the buyer?

Seiberlich: We have a couple of things, but one of our most important things is that we've been around for 40 years. If you call either inside sales or a customer service, you're going to get somebody, on average, with over 10-plus years of furniture experience with us, and that's a big thing. They understand our products. Our vendors come into our office weekly and explain our products. Our salespeople know the products and they can really help you find a solution that fits you.

And that’s one of our  biggest selling points -- our people. That’s an important thing for us. They have the knowledge that they need and they're not just order takers. They're much more. Everybody on our side who answers the phone are furniture experts. That’s what they do.

Gardner: Do you find that those salespeople with that track record, with that depth of knowledge, are taking advantage of things like the Ariba Network to get more data, more analysis to help them? Have they made that leap yet to being data driven, rather than just experience driven?

Seiberlich: We're getting better and we're consistently improving.

I agree with Mike’s point, one of the hardest things is making sure that we align ourselves with our buyers’ needs, figuring out what’s important to them and then making sure we are addressing those situations. That’s a challenge, and when you figure it out today, it changes tomorrow. That makes it even more challenging.

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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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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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.

Reduce post-production issues by 80 percent
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Build applications that meet business requirements

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
Download the HP white paper
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
Download the HP white paper
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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