When I talk to SAP customers, consultants and competitors, there's often a great deal of confusion about what the venerable enterprise software player is actually selling in the Spend Management world -- not to mention where they're headed. Next week, I'll begin to shed some light on the vendor's product direction in the areas of eProcurement, contract management, and spend analysis. But today, I thought I'd briefly touch on -- and clear the fog -- around the sourcing products SAP is selling. The answer, to put it simply, is two. SAP sells its E-Sourcing tool (originally acquired from Frictionless) and its own SRM-based sourcing tool that, in version 7.0, will feature additional capabilities as well. Today, E-Sourcing is not a component of SRM, but it does have SOA-based process integration with the broader suite (in the defense of Emptoris,Ariba and other competitors, they, too, offer similar sourcing integration into SAP).
SRM sourcing, however, is integrated directly into the broader SAP eProcurement/SRM suite. From a feature/function standpoint, each application has its advantages and disadvantages. In fact, some companies are using both SAP sourcing tools within their procurement operations. For example, in a new version, E-Sourcing includes a number of enhanced auction and negotiation formats. In comparison, the capability advantages of SRM 7.0 sourcing will continue the SRM sourcing focus on close operational ties to sourcing (e.g., making a transactional buy more of a sourcing exercise). Obviously, this comparison skims the surface of both products. Stay tuned for further analysis of both in the near future.