When Value Chains Become Value Networks, Business Becomes Sustainable

Whether a business is listed on the New York Stock Exchange or has only a single storefront located on the corner of a busy street, both have at least one thing in common: digitalization has never been more urgent.

While the complexity involved certainly differs, both these businesses are after the same goal: flexibility to deal with unrelenting change. But it’s not just flexibility! Today’s business must demonstrate high ethical and environmental standards. And they must verify that their suppliers’ operations – and even those of their suppliers’ suppliers – apply the same high standards. So, flexibility must now also be sustainable, all along the value chain.?

SAP’s intelligent enterprise strategy is the foundation for that. However, our aspiration goes beyond achieving efficiency for the intelligent enterprise. We’d like to take enterprise software to the next level and move towards a sustainable future for individuals and businesses. And that leads us to business networks. Because, what’s a sales order for one company, is a purchase order for another – business today is global and hyperconnected. Achieving sustainable business practices means embedding sustainable practices across processes, end-to-end and touching on all dimensions of the ESG (Environmental, Social, Governance) criteria.

Unprecedented demands from shareholders, employees, consumers, and investors are driving this push towards sustainable business practices and growing green economy jobs. According to the World Economic Forum, the green economy is among the fastest growing sectors, as measured by job growth, with a projected increase of 35% yearly worldwide.

So, what is going to enable businesses that urgently need sustainable flexibility? Business networks ?offer the visibility, collaboration, and intelligence across the supply chain that’s essential to attain green growth. Siloed, one-to-one connections between individual trading partners limits interaction and reduces collaboration between companies and processes. Cooperation across companies and various dimensions of the value chain is precisely what’s required for designing, manufacturing, delivering, and maintaining products in ways that minimize carbon footprints, decrease waste and ensure social equity. Then value chains become value networks that together can achieve sustainability goals much better than any company on its own.

SAP Business Network is the world’s largest network of its kind, combining the Ariba Network, SAP Logistics Business Network, and SAP Asset Intelligence Network. By enabling customers to connect with their business partners and manage multi-enterprise commerce flow, we bring value to our 5.5 million trading partners in the network and move them closer to their sustainability goals.

Supplier Collaboration for Responsible Sourcing & Purchasing

Today’s sustainable enterprises want deeper insights into their supply chains, including the sustainability values of their trading partners. They want to align those of their own and their consumers. SAP Business Network, along with our ecosystem of partner applications, creates the transparency needed to make decisions based on a range of criteria. And when the performance of existing trading partners doesn’t align with a business’ sustainability goals, shifting to new trading partners has never been easier. With SAP Business Network, businesses can quickly discover new, more sustainable providers across industries and geographies.

Take, for example, a business that wants to increase the amount of sustainable packaging it uses. Our network helps it to search and discover packaging trading partners that aligned to commodity types, delivery locations, quality certifications as well as diversity and sustainability objectives, and much more. Imagine accessing the sustainability profile of suppliers. Newly planned capabilities will make this part of the purchase requisition process, so procurement managers have supplier sustainability profiles at their fingertips.

Logistics Coordination for Accountability

The provenance of products and the circular journey of their component parts is something consumers care about deeply. The SAP Logistics Business Network material traceability option provides that transparency for more accountability. Where does the product come from? What does it contain? When was it packaged and where? How long was it on the road or in a shipping container? The material traceability option reinforces sustainability throughout the supply chain to create a trust network across material flows.

Asset Intelligence for Energy Waste Reduction

Reducing energy-intensive activity has long been the go-to approach for sustainable business operations. But SAP Business Network enables next-level asset intelligence where savings are measurable. Let’s suppose a community operates electrical vehicle charging stations across multiple cities, spanning hundreds of kilometers. These assets require maintenance periodically. They may even break down unexpectedly. Businesses can connect these assets with sensors, thus reducing the need and frequency for technicians to travel to remote locations. Digital twins make maintenance more predictable, adding up to real savings when assets are geographically spread out.?

What’s Good for One is Good for All

But even beyond our own digital commercial network examples, industries are embracing the network economy as a means for finding solutions to some of the most complex challenges of our time. The Catena-X Automotive Network, of which SAP is a founding member, is creating a uniform standard for information and data-sharing throughout the network which reflects the entire automotive value chain. Catena-X is an open, scalable ecosystem in which automotive manufacturers, suppliers, dealer associations, equipment suppliers, and application providers, can all participate. The companies involved aim to increase the automotive industry’s competitiveness and sustainability, improve efficiency, and accelerate company processes through standardization and access to data.?

A unified business network enables all trading partners to access combined intelligence in near real time and apply it to complex problems together. When a network reaches across functions, across industries, across the world, companies have the power and flexibility to solve some of today’s toughest social, economic, and environmental issues.

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