Thought Leaders in Big Data: Interview with Tim Minahan, Network Strategy VP for Ariba (Part 5)

Sramana Mitra: How does a new small company entering in this system break through? We are seeing a huge amount of usage of these services exchanges – Elance, oDesk, etc. – and one thing we always hear from small companies is when they start transacting and selling on those exchanges, it takes them a long time to establish themselves. What is your reaction to that?

Tim Minahan: I think there are a couple of things you can do. We tried to optimize both in an automated way and in a low-touch way to help particularly small sellers to begin to get more exposure with global 2000 buyers. One is when you come to register in the network, guiding you to a robust profile – just like what you see on LinkedIn, where you get your little notice that says your profile is only 80% complete – you should add your picture, etc. We have a similar approach within the network to make sure that when someone is searching for that web developer in the Atlanta area, you are appropriately represented. That is certainly point number one. There are certain ways to increase your exposure within the community. We have, like many do, a customer community where members provide best practices, for example. So there are channels for small sellers to demonstrate their expertise.

The third way is to also either bring your buyers or recruit your buyers who are already participating in the network to either rate you or connect with you through the network. The law of networks says “Each new member increases the value of the network of every other member exponentially.” When you are a new member in the network, just like on LinkedIn, when you make the first connection, you can then connect to their connections and so on. The same thing holds true in a business network. After you join, if you can join and connect with one of your buyers already your performance rating goes up because there is a buyer on the network who is vouching for you by giving you business.

SM: In terms of these verticals you were talking about earlier – obviously when the entire supply chain of a company comes on board, or a large portion of the supply chain, you get a lot of industry-specific network effect happening. There is also a data angle to that. The whole data structure – the taxonomy of that industry – comes on board as well.

TM: Certainly. We support transformation between different industry XML standards, as well as other data format standards, [to] function as a Rosetta stone for businesses. For example the mining industry has a standard that is supported here and that includes some required information for them. We can translate that into another format required by the buyer.

SM: I have seen a few of these vertical specific networks, and I have seen one in the shipping industry, for instance. How do you view those? Are they competing with you in any format?

TM: We certainly do interface with networks. A good example is the EDI networks. Those networks we do provide interoperability with. So many of our customers, whether they are buyers or sellers, often need to hand off a document or engage in a process with those networks.

SM: I was talking more about vertical specific networks like the auto industry, for example, has a specific auto network business.

TM: Yes, it has the ANX. We are complementary to them. Many of their same customers also use our network – sometimes to support the same process, sometimes to support a different process or span category than they are using on the ANX.

SM: Country wise, where is the bulk of your presence right now?

TM: More than half of the transactions that are going on in the network emanate and occur outside of North America. We have a significant amount from Europe, Latin America, North America and Asia. Most are happening outside North America, though. It is truly a global operation in 190 different countries.

SM: That is very interesting. That says a lot about the kinds of industries you are catering to. Obviously, their supply chains are outside of the U.S. I imagine the buyers are more in the U.S., but the suppliers are outside of the U.S.

TM: I think it is fair to say that. In Western Europe and the U.S. you have some of the larger buyers. We also do have some of the larger buyers in Latin America and Asia, but the predominance is in Western Europe and North America. But the supply chains are global by their very nature.

SM: It was very nice talking with you.

TM: You too. Goodbye.

This segment is part 5 in the series : Thought Leaders in Big Data: Interview with Tim Minahan, Network Strategy VP for Ariba
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