This is the second part of a two-part interview series with Manfred Heil. Heil is Senior Vice President, SRM, at SAP. Formerly, he was an executive in GE’s procurement and sourcing group in Europe and served as CEO and Founder of Goodex, a European sourcing company.
Spend Matters: What's next for procurement? Once you've started with the basics (e.g., spend visibility, eProcurement, strategic sourcing, contract management), how can purchasing organizations continue to create new areas of value?
Manfred: My assessment is that 90% of companies have not yet realized these basics. Our community tends to believe that we are already there. It's almost like a self-illusion. If you look under the hood you will find that major ground work needs to be done. Master data management is still a source of ongoing frustration and misinterpretation in many companies. Compliance management and closed loop processes are often not realized because a zoo of inherited stand-alone applications can’t talk to each other. So cleaning up the existing systems and making them scale is a major topic for the next two years.
We also see a big need to bring desktop applications and enterprise applications together. Today, procurement professionals need to cope with two distinct IT worlds: SRM/ERP on the one hand and Microsoft Office on the other. SAP's partnership with Microsoft is focused on overcoming this. Different user experiences, redundant data entries and process inconsistencies will be history one our joint product "Mendocino" starts shipping in 2006.
Looking even further out, the next major step in evolution will come from a new paradigm in software architectures. Service-oriented architectures will enable companies to design flexible and modifiable processes and IT landscapes, so they will be able to drive their own process innovation as key source of differentiation without jeopardizing the integrity of the system. The contradiction between custom-made and standard will fade
Spend Matters: What is SAP's role in the SRM market? Is there room for vendors and service providers, large and small, or do you expect rapidly consolidation?
I expect both. The market will continue to consolidate over the next two years, but you will also find innovation and we hope that much of this innovation will happen within the SAP ecosystem and on the SAP platform. At SAP, we are evolving NetWeaver to become a true "business process platform". All of our applications will be based on this platform, and we will also make the platform available to other ISVs. Some will choose to complement our solutions, but you will also find competitors adopting this platform. So co-opetition will be reality in the SRM market.