In this case, participation in networks and marketplaces is likely to be greeted with much better success provided suppliers successfully know how to market themselves via a network or marketplace model. However, if that same buying organization is using Ariba or another tool for a tactical, one-off buying exercise which will result in the specific issuance of an immediate PO after the event, then the chances they'll consider a qualified new supplier are materially higher.

Nine times of out ten the unknown supplier serves the purpose of driving down incumbents. Unless there are extenuating circumstances (e.g., entering a new geography, past supplier performance issues), there's only a small chance of a new supplier ever getting awarded business in this manner. Large buying organizations tend to award business to incumbents whenever there is a strategic sourcing event. In this case - and I speak from my own experience having been in a sourcing role at one time at a company Ariba acquired - I can tell potential suppliers considering participating in these events (and paying to do so through networks) that the probability of success is extremely small. Perhaps most important, it's essential to understand in what type of tactical buying or strategic sourcing processes a customer may use a supplier network or marketplace to identify new potential vendors.Ĭonsider that if a buying organization is using Ariba Sourcing or an equivalent tool to run auctions or other types of competitive bidding events where they're trying to put in place a long-term agreement with their supply base (e.g., 1 year, 2 years, etc.). Now, it makes sense to step back and look at supplier participation in specific marketplaces by putting on a buyer's cap and deciding accordingly which types of networks might make more sense. In the first post in this series, I shared some external thoughts (as well as our own opinion) about what suppliers should consider before selling through an online supplier network or marketplace channel.

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