Last week at the Ariba LIVE 2013 conference, I led a discussion session titled “At the Intersection of Social and Business Networks” with about fifty senior executives in supply chain and procurement. I made the case that we are currently seeing the rise of supply chain operating networks, the business equivalents of Facebook and LinkedIn, which are enabling communities of trading partners to communicate, collaborate, and execute business processes in more efficient, scalable, and innovative ways. We then explored several questions together, including:

• What are the most promising opportunities business networks have to offer companies?
• What are the main obstacles and concerns companies must overcome to further adopt network-based business processes — and how do they overcome them?
• What can business networks learn from Facebook, LinkedIn, and other mainstream social media sites in terms of user experience?

The timing of my session was perfect because it followed a keynote presentation by Sanish Mondkar, Executive Vice President and Chief Product Officer at Ariba, where he showed (via a demonstration of a new solution called Ariba Services Procurement) what’s possible at the intersection of social and business networks. Here are some highlights from his presentation:

• Sanish highlighted one of the hidden values of a business network: the creation of a Commerce Graph, which maps the business relationships between companies. Ariba believes that Commerce Graph-aware business apps are inherently more intelligent than traditional applications, and they will drive the next wave of business productivity and effectiveness. I completely agree, as I outlined in “Facebook Graph Search, Through a Supply Chain Lens” earlier this year.
• The ability to provide users with network-based intelligence is arguably the most important attribute of a business network. As I’ve written about many times, what sets a network-based solution provider apart from a traditional software vendor is their ability to leverage the vast quantities of data flowing through their network to provide customers with timely insights and intelligence that they otherwise couldn’t get. In the Ariba Services Procurement demo, for example, the system automatically presented the user with network-based intelligence and recommendations (based on real-time data from the Ariba Network and various third-party data sources) about labor rates, lead times, job skills, and other information to help the user make smarter decisions about the task he was performing.
• In a posting last month, I argued that supply chain solution providers will start to compete on design, with the “consumerization of IT” being a key driving force. The UI presented in the demo was a perfect example — simple, intuitive, and similar to the look and feel of consumer sites and applications. The most interesting part, however, is how Ariba is integrating its online user community (Ariba Exchange) into its user interface and leveraging it as another source of network intelligence. As a user is performing a task, related content from the user community is automatically pushed to the UI to provide the user with insights from other customers about the task he is performing.
• Ariba plans to expand into supply chain, logistics, and inventory management processes, with the first solutions coming out in 2014. No details were provided, but clearly SAP and its customer base will play an important role in defining the roadmap.

I had the opportunity to interview Sanish afterwards to discuss the points above in more detail. Watch the video below for Sanish’s comments on:

• The three important attributes of a business network
• Why Ariba is looking to expand into supply chain, logistics, and inventory management
• The role and value of network intelligence
• The biggest misconceptions and questions companies still have about business networks

Even though I’ve been talking about supply chain operating networks for more than a decade, in many ways we’re still in the early stages of making the vision a reality. Thanks to the consumerization of IT and the growing recognition by technology companies and customers that “software is not enough” when it comes to supply chain management, I predict we’ll see more innovation and market adoption of supply chain operating networks (or, if you prefer, “social business networks”) over the next 2-3 years than we’ve seen in the past decade.

Ariba is certainly not alone in pursuing this path. Descartes, E2open, LeanLogistics, Elemica, and others are also pushing the envelope in this area (see my interview with Descartes CEO Art Mesher from earlier this year). How these networks will continue to evolve and interoperate remains an open question — but I’m very bullish on the future. Stay tuned because I believe the best is yet to come.

(Note: Descartes, LeanLogistics, and SAP are Logistics Viewpoints sponsors)