Aberdeen's Vance Checketts recently penned the brief "E-Procurement Head-to-Head: Oracle & SAP vs. Ariba vs. BIC" that slams the eProcurement returns of SAP and Oracle relative to Ariba and best in class organizations. Ariba, of course, was more than happy to promote it as soon as they got their hands on it. And that's not surprising given Aberdeen's findings that suggest SAP and Oracle eProcurement shops are in the dark ages when it comes to supplier enablement -- perhaps the most important metric which determines the ultimate ROI of the solution.
Now, anytime I see Aberdeen's name on something these days, I always pause to question the validity of the research given the pay-to-play nature of their publishing and lead generation programs. Granted, this is not the same as paying to be featured in a whitepaper (which Aberdeen has moved 100% away from, thank goodness), but certainly, those who spend money for Aberdeen lead generation programs are more likely to feature prominently in logo, if not in substance, throughout an analysis (or vendor lists at the end of studies, which the firm touts to its vendor clients as proof their they're writing about them). And besides, it's hard to dismiss the pay-to-pay implications -- however subtle they are -- when the sales representatives from a firm are more of a force in briefings than the analysts. To wit, I heard from a senior industry figure from a rather focused vendor that there were three sales representatives in attendance during their most recent briefing (that’s right, three).
Enough of the upfront disclosures on how to interpret this research. Vance Checketts, Vice President, Global Supply Management, who wrote the report in question, is more upstanding than almost anyone I've ever met in this sector from an ethical perspective, and I know that he would not allow the Invisible Green Hand to get the better of his research. So with that said, I do believe the brief is an honest piece of research, in spite of the practices of the overall firm. Perhaps most important of all, Vance is in fact a Spend Management ERP alumni (having spent many years building, selling, and touting Oracle's procurement and sourcing applications). If there is anyone who can look at the situation objectively -- especially because I know he was satisfied during his time at Oracle -- it's Vance.
So what did Vance find in his analysis? Very damning numbers, that's what. In fact, in looking at more than 200 procurement installations, he could not locate a single one where SAP or Oracle had more than 1000 suppliers enabled. Specifically, "Oracle and SAP customers' success with supplier enablement dropped sharply after only 100 suppliers." That's right, 100 suppliers! In my view, you could roll your own eProcurement system, hardwire 50 suppliers into, and get better returns that what SAP and Oracle offer if this is the case. In his words, "Ariba customers were top performers in tour research, consistently achieving best in class status. The only are where SAP and Oracle customers scored ahead of Ariba customers was in integration to other systems".
But Ariba is not the only "winner" in this research. It's the plethora of small eProcurement players who have built entire businesses around enabling the eProcurement shortcomings of ERP. Take Ketera, for example, who has a complete eProcurement solution (including a great message around enablement). Or what about Vinimaya and Aravo, two other providers who can make the difference between material returns and wasted investment in ERP eProcurement? I could go on (e.g., mentioning CC-Hubwoo and Perfect) but hopefully you get the point. And that is ERP eProcurement is largely wasted because 95-99+% of a company's suppliers usually remain unenabled following an implementation.
In my view, perhaps the most important thing the research shows is that companies should separate out the requisitioning / transactional eProcurement decision from the supplier enablement one. If a company chooses to go with Oracle or SAP for eProcurement, they should look to others from an enablement perspective. Otherwise, they'll be at a significant disadvantage relative to their industry peers, as Aberdeen's number show. And don't for a minute believe that a forced upgrade to a new ERP catalog content management or master data management system is going to solve this problem. Supplier enablement, after all, is not just about software -- which is not something SAP and Oracle seem to fully understand, as evidenced by Aberdeen's findings.