08 July 2004 | David Arminas
The newly merged Ariba and FreeMarkets supply chain solutions company will offer one-stop shopping for purchasers looking for information transparency, buy-in to procurement policies, technology and contracts, and help with driving through changes.
But Michael Schmitt, executive vice-president and chief marketing officer at Ariba, said the company was not a monolith that would dominate the market.
"Ariba can now give clients market visibility by product category, performance based on closed-loop technology and spend history based on the information cleansing, service and analysis capability," he said.
But he added that it was rare for a client to use one solution provider for all its needs. "Ariba will not be the Microsoft of supply chain solutions," he pledged.
"We do get some deals of that sort that are good for us, but most clients ask us to take on specific initiatives," he added.
The integrated company, whose merger was approved last week, has more than 1,600 employees operating in 21 countries with more than 500 leading companies, including more than half those in the Fortune 100.
Schmitt said much business of this nature came from successfully addressing one business initiative that in turn led to more work with the client. Ariba could now tackle these challenges better. "We are not the big gorilla here," he said. "The big gorilla is enterprise resource planning (ERP).
"But ERP does nothing for information transparency across multiple areas, does nothing for procurement performance measurement, and does nothing for benchmarking of prices.
"It doesn't help purchasers to gain buy-in from their CEO, their peers or business units, or get the front lines buying off the contracts sourced."
He added that ERP vendors had more than $20 billion of revenue, while Ariba managed $360 million. "But we are 100 per cent focused on spend management and tackling those three pain points our customers have."