SAP is chasing the midmarket—it has two different ERP systems that are aimed at midsize companies with less than $1 billion annual revenue in SAP Business ByDesign and SAP S/4HANA Cloud. However, it’s not only the ERP systems that SAP is using to lure in new midmarket customers, its line-of-business cloud divisions are doing the same. Cloud products, such as SAP Ariba, might be gateways to greater SAP investment.

Why NatureSweet Adopted SAP Ariba

That’s the case for produce company NatureSweet, an 8,000-employee organization which recently implemented SAP Ariba Snap—the vendor’s midmarket focused offering for procurement. NatureSweet views SAP Ariba as just a first step into the SAP ecosystem.

“We view SAP Ariba as the first part in a relationship with a long-term vision,” says Matt Volker, VP of supply chain at NatureSweet. “We are working on the bolt-ons first.”

There’s a growing trend of SAP customers adopting SAP Ariba before buying SAP S/4HANA, according to Barry Padgett, SAP Ariba president. He says there have been 25 instances in Q4 2017 of companies using cost savings gained from SAP Ariba to purchase SAP S/4HANA.

Making SAP Ariba Adoption a Snap

Padgett started as SAP Ariba president on January 1, 2018, taking over from Alex Atzberger. Padgett comes from a long tenure at travel and expense software-maker SAP Concur—perhaps the SAP acquisition that has done the best job at capturing the midmarket.

“The obvious thought about the midmarket is that it is a great way to go get net new names, but the reality is that doesn’t come for a long time,” says Padgett. “For Concur it took almost 10 years—for five years it wasn’t material in terms of revenue.”

SAP Ariba’s first step on that path is through SAP Ariba Snap, which is geared towards the midmarket by limiting the customization that typically is needed for larger organizations. Snap is designed to offer simplified pricing, online support, and implementation and process best practices.

Go to SAP Ariba with Clean Supplier Data

The speed and ease at which a company can adopt SAP Ariba Snap depends on how much historical data it is bringing along. In NatureSweet’s case, it had a lot of data cleansing to do, but that was aided by a previous implementation of Microsoft PowerBI as a data repository. When NatureSweet went live on SAP Ariba, it was able to hit the ground running with its previous supplier information—so the extra time spent on data ahead of the project paid off. For example, the company saved money by identifying suppliers with like products, allowing NatureSweet to expand the number of suppliers it uses, according to NatureSweet’s Volker.

Rebuilding the User Experience Again

It seems that every SAP Ariba Live in recent memory features the vendor touting a revamped user interface. This the 2018 show in Las Vegas was no different, as another new interface was unveiled, with the expectation for it to be generally available at the end of 2018. Interestingly, this new user experience isn’t based on SAP Fiori.

Padgett sees user experience as another key to capturing the midmarket and something that has been key to SAP Concur’s success. He also says that SAP Ariba’s user experience needs work to catch up to one its primary competitors, Coupa.

“User experience is No. 1 in where the market is going,” says Padgett. “Where Coupa is winning is that they can do a complete demo on an iPad—while we need multiple laptops and screens. Coupa doesn’t even stay for the demo—that’s how high the bar is from a user experience perspective.”

When it comes to procurement, an appealing user experience is even more important than in the travel expense realm. SAP Concur is a “brute force” deployment, Padgett says, because employees must use the application if they want to get reimbursed for expenses. In procurement, employees can still circumvent SAP Ariba and buy in their preferred manner. The ease of using SAP Ariba becomes essential for adoption.

Improving for all Customers

As SAP Ariba chases the midmarket, that may leave bigger customers wondering where they fit in. Padgett says the steps taken in making it easier for smaller companies to purchase SAP Ariba will ultimately be a greater benefit by making the vendor a better cloud provider overall.

“In the midmarket, the bar is so high every morning. In the large market, the bar is not always high—we are locked into five-year contracts and you can get away with some old-school implementation practices, maybe complex pricing,” posits Padgett. “In the midmarket, if you are not making progress, the customer leaves. We are spending a lot of time and energy [with the midmarket] to help make the transition from a good cloud company to a great cloud company.”