cc-hubwoo: Bad Name, Good Company (Part 2)

Last week, I penned the first of two blog entries on cc-hubwoo. In today's post, I'll continue to examine their core business model (I'm going to save the Intersources acquisition discussion for another "non-series" post later this week). As a heads-up before starting this post today, I think it's important to say that even SAP shops in North America should pay close attention to the cc-Hubwoo option, since the company is making serious investments outside of Europe, and by 2008, their executives believe that 50% of the company's revenue could come from North America.

But digging into the eProcurement trenches again and continuing the discussion from my previous post, one of cc-hubwoo's core positioning tenants is the value of fast implementations based on their pre-configured SAP SRM platform, as well as their specific deployment tools and processes. For any company who has gone through an ERP SRM implementation which has dragged on and on, this approach makes a lot of sense, and helps differentiate cc-hubwoo from other competitors

Another central tenant of cc-hubwoo’s approach is to provide short, medium and long-term solutions which are flexible based on the needs of their customers. For example, a customer might implement a cc-hubwoo On Demand eProcurement deployment thinking that they will move to a behind-the-firewall SAP SRM implementation in 12-18 months. But if they choose not to, they can stay on cc-hubwoo until they're ready (with relatively easy migration since cc-hubwoo has such close ties to SAP).

In this regard, cc-hubwoo argues that the "duration of time spent with the On-Demand model only enhances an organization's ability to configure processes and workflows for the potential future behind the fire wall option." Even though this is marketing spin, I would tend to agree with it, especially considering the pains of an SAP organization-wide behind the firewall SRM roll-out (something which so few companies have gotten up and running with more than a minority of users and suppliers enabled).

Going forward, cc-hubwoo plans to stay as current as they need to on the SAP SRM release schedule without jumping forward too fast before the technology is proven and ready for prime time. When I talked with them, they said they plan to stay a year behind from a release stand point, but in practice, they will upgrade to more recent versions based on their customers ability to change. Indeed, upgrading their core application is not as simple as an e-sourcing one because going live with a more recent SRM version will involve new workflow, content management and other capabilities which are non-trivial.

Even though cc-hubwoo's eventual upgrade to SAP's latest and greatest SRM app is at least a year away -- my guess, not their statement -- I'm banking that SRM 6.0 (or 2007, as SAP is calling it) will be a huge step up for cc-hubwoo. But they probably won't want to tackle it anytime soon, since it's not proven in the market across dozens of scaled deployments (and since it represents such a technical and functional leap forward for SAP). Besides, it's always better to wait than be on the bleeding edge. And since so many large SAP shops are late majority or laggard organizations in general, many won't care about cc-hubwoos's delayed application upgrade approach. In fact, I'd bet they support it.

Jason Busch

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