SAP Needs to Realize that Procurement Extends Beyond the Four Walls

First, let me preface this entry by stating that it is my last post on SAP Sapphire. I've probably bored you all to death in the past week and a half with my entries on SAP SRM. My excuse for this -- if I have one -- is that I believe that it's important for the market to take SAP very seriously considering how much time and focus they're putting into their procurement and sourcing products at the moment.

Having said this, I believe that SAP is missing a significant part of a futuristic procurement vision -- at least as it pertains to the emerging capabilities within their own set of applications. And this piece is what I'll refer to as the "the external". What is the external you ask? It's everything that happens beyond the four walls of an organization. It's on-boarding and managing new suppliers. It's monitoring supply markets volatility and supply risk. It's developing an understanding of not just the performance and risk of your direct suppliers, but also that of suppliers further down the supply chain. And it's identifying -- on a continuous basis -- the best possible set of partners and suppliers to work with. Some of whom you may know. Many of whom you probably won't.

Obviously, this list is just a start. But the current SAP vision is really only an extreme -- but logical -- extension of internal transaction processing capabilities. And this vision fails to take into account that what happens outside the confines of a company is as important as what happens inside when it comes to managing procurement. The fact this is lacking in the vision of their future products -- even those shown on the main stage in front of thousands of onlookers -- is scary to me, as it shows they have an incomplete understanding of big picture Spend Management issues.

Without question, I believe that SAP will ultimately have a good shot at owning many of the procurement-driven business processes that are based within the four walls (at least within their existing installed base). But so much of procurement is about managing what goes on outside of the organization. Here, SAP's vision comes up short. Perhaps it's a great place for NetWeaver partners to fill in the large blank spaces. And it's for this reason that I'd bet on all the other best of breed vendors that I mention on these virtual pages as much as I'd wager on our favorite German ERP provider.

Jason Busch

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