It's about time that a major ERP vendor really began to understand what spend visibility is all about. Hint: Cool UIs and a few dozen reports alone just won't cut it. To wit, anyone who has been involved in any large scale spend analysis effort knows that developing frequent, current, accurate and actionable insight into spend data is critical. Any type of Spend Management initiative -- from basic strategic sourcing to game changing, industry altering models (e.g., Boeing, Wal-Mart) -- can benefit from it. But virtually all ERP and BI-driven approaches today have come up short of expectations unless pared with essential enabling technology services such as data enrichment / cleansing and spend normalization / classification (how "auto" it can and should be, I'll leave open to another debate).
In other words, spend visibility is about a total package. It's not just about whiz-bang front-end technology or the uber-spend cube alone. To date, most of the larger technology providers (e.g., SAP, Oracle, and Business Objects / Hyperion (before they were acquired by SAP and Oracle, respectively) danced around the broader issues except the analytical front end and some limited data extraction / ETL capabilities. This is why such vendors as Ariba, Emptoris, Zycus, BIQ, BravoSolution (Tigris/VerticalNet's old spend capabilities) were able to not only gain traction with their spend visibility offerings, but essentially paint the ERP players into a corner (or narrow role), despite the stated goal of many IT departments of creating the uber data warehouse.
A couple of years back, SAP began to get some religion on the subject of spend visibility and started evaluating their options. They partnered with Zycus (who the rumor is refused to sell out to SAP for what was offered to them) and also took a close look at Emptoris (again, the deal never happened). For a while, the Zycus relationship helped cement what was a reasonable spend visibility go-to-market strategy for SAP, focused primarily on promoting SAP DW. Oracle, in contrast, encouraged folks to ignore the broader spend challenge entirely at the time. "Just Don't Do It," should have been Oracle's mantra. Later, SAP would quietly begin to promote its emerging flex-based spend front-end and new analytical capabilities, while Oracle would introduce some acceptable capabilities into the market (provided you were an Oracle shop). But neither approach offered up the whole package, especially in situations where customers had heterogeneous systems environments.
Of the two large ERP vendors, SAP realized first how much it was giving up to the best of breed providers not only in lost revenue, but lost mindshare (i.e., a company that goes with Emptoris or Ariba for spend visibility is much more likely to go with the same provider for sourcing and contract management). But it would take what felt like a ten year convening of the Bundestag and Bundesrat for SAP to finally take action to create a full spend lifecycle offering. While this offering is not yet announced to the public, I've been able to triangulate from multiple sources external to SAP that it involves a much closer relationship/acquisition to enable the front-end data enrichment, normalization, classification, etc. Stay tuned for tomorrow's morning post when I'll hypothesize about what I'm guessing that SAP will soon announce to the public.
- Jason Busch