SAP Gets Serious about Spend Analytics

Yesterday, I had the chance to examine SAP's forthcoming spend analytics xApp. The new solution, which will be available separate from their current SRM and sourcing capabilities, has a great UI which does not at all feel like it's coming from an ERP provider (let alone a BI one). Unfortunately, the application is not yet available today. But it should be released later in the year.

SAP's new approach to spend analysis takes into account that spend data does not just come from a single transactional system of record. It is designed from the ground up like spend visibility applications from competitors Emptoris and Ariba (not to mention many others) to extract information from multiple, heterogeneous sources and then to cleanse, classify and enrich this information.

In the past, SAP had a marketing partnership with Zycus for these later pieces, but in the new release, SAP will OEM -- or own, it's not clear yet -- these capabilities from a third party software provider which they have not yet finalized a deal with (otherwise the application would have been formally launched at Sapphire). In speaking with some of the product managers working on the solution, it because clear that they understand the need to incorporate both an automated component for cleansing and classification in addition to a services-based one -- and SAP will offer both. And in a departure from the past, it appears that SAP will also do the services piece in-house (or at least work with a third party that is transparent to the customer).

The analytics component of SAP's spend analytics xAPP is the most impressive part. Just like all the other packages on the market, it comes with a set of pre-canned reports -- and I love the "snapshot" component which enables you to save reports to your handy, dandy blue leather spiral bound virtual notebook. But what I like the most is how the solution feels much more intuitive and flexible than others which are based on -- or look like -- Cognos or other BI tools. In fact, the frames-based and drag-and-drop approach to conducting queries feels more like a Mac and less like an application with client/server legacy (cleary, these guys have learned from Macromedia). Kudos to the SAP development team for nailing this great UI. But obviously the proof will be in the execution once the solution is generally available.

In its initial release, SAP plans to concentrate primarily on sourcing- and savings-driven analytics. But overtime, there are plans to introduce compliance and supplier performance elements into the equation as well. This is a vulnerability today for SAP, relative to some best of breed vendors which can incorporate these fields and areas already into their analytics solutions. But at least SAP recognizes where they need to go next.

Along similar lines, SAP ultimately plans to leverage their MDM (master data management) repository and toolset which they're forcing on customers with SRM 6.0 in the spend visibility xApp. But today, the application just sits on top of organizational data-stores using batch-based or periodic extracts. Because of this, there are limited or no advantages of going with a native SAP spend visibility solution over others from an integration perspective with the rest of the ERP suite. This will force SAP to stand on its own in deal situations and let the best solution win -- especially considering that it will initially be available only in a hosted environment.

In summary, I'm quite impressed with the look, feel and overall direction of the spend analytics xAPP. The vision is there as well, even if the initial release falls short of best of breed providers on the supplier performance and compliance sides (which it does). All in all, the solution demolishes Oracle's current capabilities for gather, cleansing, classifying, enriching and presenting spend data in a heterogeneous systems environment. After all, who says you need Daily Business Intelligence? I want spend insights from all my data sources when I want them, at all hours of the day -- not what some Delphi tells me I can have on his schedule.

Jason Busch

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