South Africa takes a larger role in global commerce through Ariba
A report compiled by Ariba for SmartProcurement
When it comes to global commerce, South Africa is fast becoming a key participant. In 2007, two local companies – TradeWorld and Quadrem, teamed up to create the largest eMarketplace in South Africa. Their aim was to help large multi-nationals and the local suppliers with whom they do business to achieve economic empowerment at a scale previously unheard of.
In 2010, Ariba, Inc., the world’s largest business-to-business commerce network, recognized the strength of the trading network that Quadrem had built and the underlying technologies supporting it, and acquired the company. Why? Because, like an increasing number of foreign investors, it sees tremendous potential in the Southern Hemisphere, says Deon Mocke, Vice President of Ariba Africa.
Together, Ariba and Quadrem connect more buyers and sellers around more commerce than any other network on the planet. More than 730 000 companies use the network to transact more than $200-billion in commerce on an annual basis, which is more than double the volume transacted on eBay, says Mocke.
In Africa alone, Ariba, through Quadrem, manages a base of over 40 000 suppliers, of which 75% are BEE verified, and 91% are classified as small, medium and micro enterprises (SMME). The result is over 700 000 transactions, more than $4-billion in annual trade and more than 2-million Request for Quote (RFQ) invites per month.
Ariba’s mission is to grow this number even further by helping local companies to simplify business commerce and grow their businesses on a global scale.
“Ariba’s cloud-based collaborative commerce solutions and global trading network have made it easier for businesses of all sizes and industries to buy, sell, and manage cash,” says Mocke. “The acquisition of Quadrem has enabled Ariba to further expand its network volume and reach and extend better commerce to more companies in more regions of the globe.”
Consumers can buy a book, manage their personal finances and track friends online because sites like Amazon.com, banks and FaceBook put consumers’ needs at their fingertips. “Ariba does the same thing for businesses and has, in fact, been called the ‘Amazon.com’ for business.”
“Anglo American is using Ariba’s solutions to provide key trading partners with access to innovative technology and services they can leverage to enhance and expand their businesses and advance its initiatives related to sustainable procurement. Through Ariba’s Quadrem Network, Anglo American can create and execute RFQs for goods and services across categories and electronically connect to its suppliers and manage procurement activities – from RFQ reception and response, order confirmation and invoice submission.”
Realizing that more than half of its South African trading partners lack Internet access, Anglo American has, with support from Ariba, established two electronic Enterprise Development hubs where suppliers can go to connect to the network and respond to the RFQs posted to the Network. And the company plans to support the implementation of several more, says Mocke
“Collaborating on a global basis is no simple task. Technology has made it easier, however, in many regions access is still an issue – particularly for smaller enterprises,” says Gary Ditchfield, Operations Supply Chain Manager, Process Division, for Anglo American Platinum Limited. “With Quadrem, we can eliminate this barrier and provide our supply base with a unique forum through which they can participate in business opportunities that may previously have been unavailable to them.”
As Ditchfield points out, collaboration is the new corporate competency. And the key to extending and improving collaborative trading relationships lies in open networks like Ariba that can be easily shared by everyone that participates in the commerce process – from trading partners and customers, to banks – not in traditional enterprise applications.
While the adoption of technology, particularly Internet-based, has been very slow in Africa compared with other more developed markets, the situation is improving rapidly. The ease with which Ariba’s Quadrem network can be accessed – nothing more than an Internet connection is required – is helping to close the gap and fuel the development of tech-savvy companies that are capable of serving customers around the world.
Take Ambatha Clothing. James Seodigeng used to spend a lot of time personally visiting companies to drum up business for the seven-person company which supplies clothing and promotional items to large and small enterprises in South Africa. When he was able to land an order, he took it manually.
However, Seodigeng has his sights set on expanding globally: he knew that in order to do it, he would need to operate in new and different ways. So he tapped into Ariba and its Quadrem Network.
He has since been leveraging the cloud-based platform to increase the efficiency of his operations and boost sales. “I’m no longer running around knocking on doors,” says Seodigeng. “I’m going specifically to a place where I know there’s someone who has a need that I can supply.”
Seodigeng estimates he can grow his revenue by 50% through the Quadrem Network. “If you want to be big, then you have to find big clients that you know have the potential to buy big and that is the kind of customer that Quadrem offers,” he says. “Through their open market, we can see a whole lot of clients. We’re not going to take them all, but we can see where we have opportunities and can prioritise.”
Donavan Robinson, General Manager of Planet Waves/Robbies Electrical, his family’s South Africa-based electrical construction business, joined Ariba’s Quadrem Network five months ago at the request of a key trading partner. He’s now using the cloud-based platform to more efficiently manage critical commerce transactions – from sending quotes and invoices to receiving orders and payments – so that he can better serve customers and line up new ones.
“In the past, it might take me three weeks to track down an order with a customer,” says Robinson. “Now that I am connected to Quadrem, I can get things and respond to them immediately. And I don’t have to sit down and phone people. I can visit clients and electronically see where things stand.”
Robinson would ultimately like to expand his business: he sees the Quadrem Network as a prime vehicle through which he can do this. “Quadrem in South Africa is connected to a lot of corporations and they can make introductions for us,” says Robinson. “If I go to a company and they are using Quadrem, I can say I am on the network and they can easily access me from their side and in this way, we can grow our business, and ultimately, our revenue.”
Many companies are skeptical of the notion that technologies like those used to drive personal commerce can be applied in the business world. But many in Africa have seen the writing on the wall and recognize that the future of commerce – and ultimately their success – will be driven by them.
Organisations like Anglo American, Ambatha Clothing and Robbies Electrical, that are strategically leveraging business networks, will create competitive advantage and deliver their organisations to new worlds of excellence.