Payments with Purpose: Julie Gerdeman, SAP Ariba

A conversation with Julie Gerdeman, GM Payments and Financing, SAP Ariba, which took place at SAP Ariba Live in Amsterdam, 2018.

What attracted you to this role in the first place? What is it you like about payments?

I actually grew up in the payment space. I worked at American Express for many years, then J.P. Morgan Chase. For most of my career, in fact! I’ve only moved into the high-tech space for the last five years. So, for me, it’s coming home to B2B payments.

I feel like this space is actually the one that’s being disrupted the most. Payments, in my mind, are commerce. Payments are commerce – full stop. I joined Ariba because Ariba is source-to-settle. My business-to-business payments background and passion for that is the last mile in source to settle. So that’s why, when I came over, I led supplier enablement on the Ariba network. My role involved all the enablement and onboarding of all the suppliers, learning the network aspects of it all.

But I really feel like I’m coming home because the payments piece is honestly, to me, the one that has the highest potential for disruption. We’re seeing disruption everywhere, even technologically, with things like blockchain.

We’re already seeing it a lot on the consumer side, right? We’re seeing things shift in consumer, that’s always first, then it’ll shift to B2B next. To me that’s the biggest and what we’re seeing is the user expectations.

The demand of the user, and the expectations of any user, consumer or user of our corporate software, are heightened. And that’s true in payments. The ease of everything now has heightened demand and that’s created the opportunity for disruption but also greater competition. When I say competition, I mean banks and fintechs. The space is really different and evolving, but what now is happening is an opportunity to collaborate, and not just compete.

Of course, collaboration is central. So how do you interact with that? How are you involved in that?

We have the world’s largest business network, with more than three million buyers and suppliers, and $1.7 trillion USD worth of transactions annually flowing through it, and to me that means the biggest opportunity for collaboration. Our open ecosystem will allow for connection and collaboration unlike we’ve seen before. If you think about that as a platform, with banks as partners in that ecosystem, the whole dynamic can potentially change.

You can innovate a lot faster, too.

Totally. So, the banks still get to do what they do, right, which is move the funds, and all the regulatory requirements, but then we have the data and information and the network to pass back and forth. So that’s what makes it really exciting, and that’s actually why I took the role, because there’s so much that we can do in this space.

It’s incredibly agile, that’s true. But what are the main challenges and blockages you find there?

A couple of things. Number one, I’d say, is corporate cholesterol. Companies that have legacy systems or processes have their own cholesterol.

I’ve never heard it referred to that way, that’s a great description.

Right? That’s one challenge, just working through change management with these legacy systems, and the silos too. Procurement is now being recognized for value beyond just savings. And when that’s the case, then the finance line ties together well. Because there’s economic value happening here and cash flow, managing the cash flow, and there’s economic value on savings and procurement, but bringing those together continues to be a challenge. I think if we overcome that, collaboration can really take things to another level.

The next challenge I’d say is regulatory. We’re talking about an open ecosystem that could potentially allow for things like fraud, data breaches and so on. But, to me, this is a challenge and an opportunity. It can present a challenge because we need to have security and risk preventive measures for fraud, which is a good thing, but there’s also increased regulation that occurs as a result. Regulation will come because more and more data breaches will occur and governments around the world want to protect people. Greater regulation it’s greater requirements of software and technology.

For us, that’s a challenge. But one of the reasons companies talk to us about payables is the fact that we’re a tech company and we understand risk, compliance, fraud prevention, and so on, beyond and complementing a bank. So, from talking to customers, I’d say those are the three main challenges.

Let’s talk solutions. To your mind, which are currently the most valuable in this space?

This space is ripe for disruption and because of that the new emerging tech is active here. So things like a Blockchain use case for, for example, a distributed ledger in financials is being looked at in Europe. We’re evaluating Blockchain because, even though we already have so much trust in the network, we could potentially tie that trust to Blockchain.

AI is another interesting solution. I hosted the Diversity Lunch yesterday, which was focused on disability and the inclusion of disability in the workforce. Several of our speakers, who were disabled, talked about AI – voice to text, text to voice, and so on. One of the reasons that AI started was to help people with disabilities. We can actually create a more inclusive world for people by utilising AI.

I read a recent blog you wrote about the lessons you learned growing up as one of nine siblings and how you’ve applied that to business. How has it prepared you for coming home to the complex, multifaceted world of payments?

You read it! Well, when you’re one of nine children you really need to learn to listen. I learned that listening first, then communicating later, is best. If you listen, you think, and then you speak, people will then listen to you. That way you’re not just talk over one another. In an environment of nine kids you can imagine the chaos! The other thing I learned is empathy.
The last article I wrote, which ties more to this, was about being a daredevil and leading with courage. The reason I bring this up is, I do think I was raised with an optimistic attitude – that anything is possible and you can overcome challenges. Why this relates to payments is that I think there’s so much possibility. I know not everybody gets jazzed about B2B payments, but I do! This is what I grew up with, this is what I know.

So, tell me a bit about SAP.IO.

SAP has started a venture capital team, where we evaluate ideas, called .IO. We’ve invested in a company called Apparent Financing, which is a lending tree for small business suppliers. If you’re a small business and you want a loan, or a line of credit, you can go to Apparent Financing and apply. Apparent Financing, on the backend, is leveraging Ariba network data to help make a lending decision. Using all that data, including invoicing, and so on, we can discover if a company is a good candidate for a loan or a line of credit. The reason I bring it up is that it ties in to our purpose-driven strategy. These small business need funds. For example, during the hurricanes in the US, everything in the Texas area was devastated. Apparent Financing, through .IO, offered disaster relief loans to these small businesses to help them get back on their feet. These are the unique financing and payments opportunities that we’re taking hold of now that we’ve never done before.

It seems like there is a quite humanistic element to a great deal of work in payments these days, the idea being how can we improve lives as opposed to simply making money.

Absolutely, and that has a lot to do with why I took the role. We’ve been doing a lot about procurement with purpose, I’m doing payments with purpose. I believe in the digitisation of payments and what that can do for everyone. When you take cash out of a system, it levels the playing field – for people, workers, small businesses, everyone. For example, if you’re in an emerging market and you’re an employee of a small business, you could be working 12-14 hours and being handed cash. There might be a middle man who takes some of that out, or you might have to travel home across unsafe environments. Imagine then having mobile, digitized payments on a device – it’s safer, more efficient, with no middle man and all-digital.

Related reading