ARIBA: A Successful Story in E-Commerce

ARIBA: A Successful Story in E-Commerce

Zhongxian Wang (Montclair State University, USA), Ruiliang Yan (Indiana University Northwest, USA) and James Yao (Montclair State University, USA)
DOI: 10.4018/978-1-61520-611-7.ch053
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Abstract

Ariba services major corporations, and provides services to smaller companies as well. In this chapter, the authors will examine how Ariba, a small startup company during the Internet boom of the 90’s was able to overcome hardships, survive market and industry downturns, and continue to thrive and survive in such a competitive industry. The authors will also review major events and innovations that helped the company to grow and succeed rather than to fail.
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Background

E-commerce was in many ways revolutionized by Ariba Inc, a leading independent company in the sphere of B2B commerce network providers. The company has been evolving constantly, in cooperation with leading companies in the industry, in order to deliver E-commerce platform products to its customers/clients. Its value chain model has been able to develop business relationships further than anticipated, the results of which made it a top 40 Fortune 500 company.

Ariba has overcome many obstacles, including lawsuits, changing customer requirements, and organizational restructuring, however still managed to remain a leader in its specific niche area. They have done so by delivering solutions and services that meet customers’ expectations, and have been able to cope with intense competition by keeping up with today’s technologies as well as developing solutions for tomorrow. Ariba was founded in Sunnyvale CA, in September 1996, by seven men, the most influential individual being Steven Krach. Krach’s early career accomplishments included being one of the youngest vice presidents General Motors (Ariba, 2008). Having struggled with the procurement process in his time there; it became a precursor and impetus for the birth of Ariba. Krach and his associates brainstormed and came up with the idea of automating the purchasing of common supplies and services. This is a seemingly simple idea, but one with a huge demand and potential.

After three months of intensive research, which included meeting with 60 Fortune 500 companies, Ariba had a prototype developed and ready for their initial marketing campaign. Having signed software licensing deals with Cisco Systems, Advanced Micro Devices and Octel Communications, prior to software completion, the pieces were put into place for the launch of their product. Among the early competitors to Ariba were Commerce One, Oracle, I2, and PeopleSoft, Inc.

Key Terms in this Chapter

E-procurement: A system utilizing Internet technology to streamline the purchases of goods and products to reduce costs.

Supply Chain Management (SCM): The process of strategically managing flows of goods, services and knowledge, along with relationships within and among organizations, to realize greater economic value.

Supplier Network: - It works with a network of screened and qualified small-scale producers and committed medium-sized suppliers.

E-payments (online payments, Electronic Payments, Internet Payments, Web Payments, and e Payment): An electronic payment made via a web browser for goods and services using credit or debit cards.

Acquisitions: Acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly.

Business to Business (B2B): The exchange of products, services, or information between businesses.

E-commerce (electronic commerce or EC): The buying and selling of goods and services on the Internet.

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