Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I’ll be reviewing a whitepaper from Supply & Demand Chain Executive and Ariba.

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Speaking of Ariba and whitepapers, they recently updated their site and, on my first visit, I couldn’t find their whitepapers on the new site! I was pretty disappointed as they built up a really good library over time.

Fortunately, I was a little smarter or more patient (or both) this week and I was able to find the link to their whitepapers and other resources. It doesn’t appear that they date the whitepaper links, but hopefully that will be a feature that they’ll add (or re-add) in the near future.

This whitepaper, though listed as a whitepaper on Ariba’s site, isn’t so much a whitepaper as it is a digital edition of Supply & Demand Chain Executive Magazine. But I’m going to review it because it sort of answers a common question: “What the hell is the cloud?”

And, actually, it takes some reading deep into the whitepaper to get a usable answer to that question. Part of the reason that this cloud is so murky is that Ariba is using it as somewhat of a trademark or label for its latest offerings (i.e., Ariba Commerce Cloud) in addition to using it in a descriptive manner to describe cloud computing. After reading how these terms are used in such an intertwined manner, I can understand how someone asked if she could “buy the cloud” at Ariba’s conference as reported by Spend Matters. Though Spend Matters poked fun at this individual, the way the label is used doesn’t exactly lend superior clarity to the term or the service.

For example, in describing Ariba’s offering, the whitepaper said “Commodity managers manage their global categories and suppliers in the Ariba Commerce Cloud. Supplier report cards are tracked and commodity teams survey key stakeholders around the globe to determine how suppliers are performing with both objective and subjective data in the Cloud. Negotiation plans are approved and all projects are tracked with complete transparency to ensure sourcing decisions are made based on auditable lowest total cost data in the Cloud. Global spend data are scrubbed from SAP and encoded into a UNSPC-structured (sic) format that allows for spend visibility, reporting and analysis in the Cloud.”

I don’t know about you, but this description certainly makes “the Cloud” sound like something that can be purchased.

So, allow me to dredge up what the whitepaper considers definitive characteristics of cloud-based commerce, the practice (not necessarily Ariba Commerce Cloud, the service or platform). All the way on page 17, the whitepaper shares its first definition of cloud computing from Maureen Fleming, program director for business process automation and deployment at analyst firm IDC: “It’s consumer and business services delivered and consumed in real time over the Internet.”

With that definition not being very specific – because it could apply to millions of websites that have been active for many, many years – the whitepaper goes a little deeper by saying that “typically Cloud-based applications are distinguished by their strong use of standards and strong self-service capabilities. In addition, Cloud-based offerings typically provide for a pay-as-you-go model.”

OK, so how is that any different from the software-as-a-service models that have been hyped up since the mid-2000’s?

After all, even one of the CPO’s interviewed for one of the articles in this whitepaper said that “Cloud computing to me seems to be a new buzzword for something that has been around for quite some time, at least in concept…Cloud computing basically allows IT infrastructure, software, best practices and standards to be shared across an entire community in a way that allows individuals to only pay for what they use, while leveraging an infrastructure that is far greater than one could cost-effectively build on their own.”

If you’re confused, that’s understandable. Fortunately, some additional excerpts shed some light on the distinction between SaaS and cloud computing.

Much of the distinction comes from the fact that different companies will be interacting via the same technology instance. The whitepaper says “The next wave of productivity is all about collaboration and aims to attack the inefficiencies that remain between companies to enable more effective collaboration among trading partners. Industry watchers say ‘Productivity 3.0’ will be fueled by Cloud-based platforms that allow businesses to share common business processes in areas like product development and commerce.”

This distinction is solidified further with a quote from Ariba’s CEO, Kevin Costello. After he said “The key to extending and improving collaborative trading relationships lies in open systems that can be easily accessed regardless of their architecture or delivery model decisions,” Supply & Demand Chain Executive simply wrote “Translation: Cloud-based solutions.”

The last page of content in the whitepaper goes clears up the skies a bit for understanding why the cloud model is different than what we’ve seen in the past. Article author W. Lamar Chesney, executive vice president and chief procurement officer at SunTrust Banks, Inc., writes “the Cloud comprises both the on-demand solutions that power one company’s internal processes as well as the electronic networks connecting companies and their ecosystems of suppliers, partners and customers. Cloud computing, in a sense, is the ‘utility’ that provides a channel for the data and information exchange, process integration and transparency between buyer and supplier interactions through a low-cost means of integration.”

So, that’s a little more clear for me. If you’re still asking “what the hell is the cloud?” after reading this review, I can understand. But, perhaps you can get an even better understanding by reading the full whitepaper yourself. You can download your own copy from Ariba’s website (registration required).

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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