Business Networks: New Players, New Rules

Defining the roles played by companies transacting on expanding business networks

This article is meant for leaders in procurement, supply chain, logistics and asset management to understand the emerging importance of business networks and the various types of companies that can now collaborate on SAP Business Network.

Five lines and a circle, that’s all it takes to represent a human. A universal symbol that has been around from the dawn of time, from cave paintings to airport signage. In theory, this symbol alone would be enough to be used in any context, as it encompasses mankind in all its variations and diversity. But in practice, the specificity of a situation requires a more refined or definite character, be it in gender, age, mood, or any other variable necessary to the context. So the stick figure becomes a stickman, accompanied by a stickwoman sporting an extra triangular shape. To represent family, our stick couple is accompanied a couple of kids, those typically getting some extra hair in the process. Older generations of stick people receive a cane and a hat… And so our stick family keeps growing.

The same can be said about SAP Business Network: as it keeps growing in size and complexity, it becomes an ecosystem of companies playing specific roles – often more than one – in procurement, supply chain, logistics, asset management and finance. Hence the need to be specific when naming the different parties involved.

Let’s start at the high level: SAP Business Network is a B2B collaboration platform where different parties exchange information and data for seamless collaboration; we at SAP call these parties trading partners. Just like our stick figure, trading partner is the generic name given to companies involved in a commercial partnership. The terminology is used when talking about the network in general, its mission, its journey and its buzzing activity. This activity gets different flavors and colors as we delve into the specific business processes.

Those familiar with procurement and supply chain business networks are aware of their two-sided nature: on the one side are the buyers – companies that make a purchase – and on the other side the suppliers – the organizations that provide the needed product or service. Suppliers come in all shapes and forms, and some of these will also play a role in other areas of the network. Service providers, for instance, typically play an active role in procurement and are also a key player in asset management.

Typical view of a procurement network

The global disruptions of the last few years have shown that supply chain needs to be considered from a wider, holistic perspective. And that beyond buying and selling, the processes related to the shipping of good and the management of assets needed to be integrated to the overall equation. Finding solutions together with all business partners, including outsourced ones, is becoming a growing business imperative. One that requires a common system.

Creating a common asset data foundation among OEMs, components suppliers, operators, and services providers is the objective of SAP Business Network for Asset Collaboration. Many actors are present there: the manufacturers, whether they are component suppliers or OEMs (Original Equipment Manufacturers), are also part of the big supplier family. Meanwhile, operators can be defined as the people operating the purchased equipment, and as such belong to the buyer realm.

Shippers and carriers are the main roles interacting in the logistics aspect of the network. The shipper can be defined as the person or company that sends goods by land, sea or air, while the carrier undertakes the professional conveyance of said goods. This opens up the full image of the network: these shippers are suppliers, and their carriers are service suppliers to them, or suppliers’ suppliers! Wait until the shippers send goods to their professional carrier customer, and you’ll start spinning forever.

A last aspect to mention is finance. The partnership with Taulia adds this new aspect to SAP Business Network, and as it develops beyond the buyer-seller relationship (where dynamic discounting was already a possibility), it welcomes a new party to the table: financial institutions. And whether banks and financial partners are a sub-type of service suppliers or a fully different species altogether remains to be seen.

Multiple Facets of SAP Business Network

The addition of logistics and asset collaboration capabilities to SAP Business Network in 2021 was no coincidence: SAP had been feeling the pulse of the activities on the network and watching the complex microcosm of business exchange. The ability to track goods, services and their related documents from need to usage is a new necessity for successful business collaboration. This requires a common, shared platform. That this shared platform takes the shape of a complex network is only mirroring reality.

After this spinning overview of the different roles at stake in a developing network, you might wonder: who has more to gain from choosing to operate on SAP Business Network? For years, when acting mostly in the procurement realm, the value balanced more to the side of the buyer, as was pointed out by many critics. But today, as these roles intertwine and collaborate in multiple ways on one same network, the answer clearly has shifted: every company, regardless of their role, has something to gain from operating on SAP Business Network.

Learn more at sap.com/businessnetwork