Procurement Goes Mains Stage at Sapphire

So here's a question for the Spend Matters community: how do we know that as a bunch of procurement and operations geeks, that our corner of the enterprise machine has become a top corporate priority? Well, one measure is when procurement and supply chain topics make it into the traditional business press on a regular basis. And another, I'd argue, is when at the world's largest ERP software event, that procurement is used as a use-case example over financials, HR, CRM and other possible areas during the keynote address given by the CEO.

If you're thinking a scenario like this is years or decades away, guess again! Yes, it's true. Last week, procurement featured prominently during Henning Kagermann's keynote address on the main stage at Sapphire. In fact, it was the only live use case example that his team walked through using a demonstration during the centerpiece of his spiel. I took fairly detailed notes during the futuristic use case example which Kagermann used to highlight the power of enterprise SOA and Web 2.0. And here they are (with no analysis added).

The background on the scenario Kagermann's team walked through is that a procurement organization learns that a supplier is discontinuing a part. This in turn will have a direct impact on their ability to meet customer commitments. As the use case begins, the purchasing manager receives an email announcing the part cancellation. He gets -- and can manage his immediate response -- in Outlook through SAP's famed Duet integration. Here, he can begin to track it as a unique event or project and save it within his SRM workspace. As part of this, the email trail and response is captured in the user's own virtual workspace or book shelf.

Our trusty SRM-enabled purchasing manager can then begin to plot his course of action using a thought pad on his SAP desktop. This is essentially an inline Wiki which allows him to begin structured and unstructured interaction with his team members. At this point, he also begins to check for alternative supplier lists within the application, dragging and dropping approved supplier lists into his workspace just a like a consumer web application (although this mock-up appears light years ahead of Amazon in design).

Even though the interface is highly intuitive and streamlined, it provides a direct connection into SAP (leveraging what is presumably MDM) enabling our procurement manager to type in part numbers or entry attributes to identify other suppliers in the same category. He can then invite product engineering, quality and other professionals into his project team to find short-term alternative options and develop long-term possibilities. But in this virtual teaming, he has complete control based on his ability to assign rules and tasks.

When it comes to qualifying suppliers for the part, our user can incorporate supplier qualification templates and processes which he can drag and drop into his project workspace. These are then pre-populated with existing content about suppliers and analytical information that can be used to make decisions. In the on stage example, this took the form of DPPM data (defects parts per million), RTY (roll throughput yield), and OTD (on time delivery) information.

All in all, the example looked extremely slick, and successfully highlighted the power of SOA and Web 2.0 to leverage processes, knowledge and content across a distributed operating workspace with multiple team members, leveraging structured and unstructured content and collaboration. I can only imagine the lobbying that SAP's SRM team had to make to get the executive team to make this the example they included on the main stage during Kaggerman's keynote. All in all, this show how far procurement has come from a respect perspective -- not to mention how far SAP has come in valuing it as a key component of their overall applications suite and development strategy efforts. Granted, while SAP is years away from having all of these integrated capabilities -- which I'll talk about in a post tomorrow morning -- it casts a great vision for the future of ERP-based procurement technology.

Jason Busch

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