Waiting for SAP SRM — To Host or Not to Host

Over the past couple of months, I've spoken or met with at least a dozen companies that have started down an eventual Spend Management technology journey that will lead to an installed version of SAP SRM. The operative word here is "eventual" -- whether it's during Obama's tenure in the Whitehouse, before the next ice age or until the next major asteroid strikes the earth is anyone's guess. For many companies, this migration will come after using an installed or hosted version of a best-of-breed application such as Ariba, Ketera, Enporion, Coupa, ePlus, etc. But others will decide to put their SRM shelfware seats on "active duty" so to speak, finally deciding to roll-out an implementation that should have occurred years ago.

But there are other options and I'm surprised by the fact that not all SAP customers are aware of them. One of these is to punt on both the best of breed option and an installed SRM package -- which may or may not be the right decision -- and to go to an outsourced or hosted version of SAP SRM. Hubwoo is perhaps the best-known SAP hosting partner for SRM and SAP reps are in fact compensated based on selling hosted-Hubwoo seats. But there are other hosting partner options -- Accenture, IBM, Infosys and Quadrem are also SAP SRM hosting partners, providing a similar model to Hubwoo. And both Hubwoo and Quadrem also bring ready access to their supplier networks for more rapid supplier enablement and ongoing transaction and document exchange.

How do you know if a hosted SRM option is the right one? Perhaps the first step is to run the math. I've heard, in some cases, of SAP hosting partners being able to take over the licenses that they may have already bought and have sitting on the shelf, lowering the cost materially over other options. Another question to ask is what type of adoption and enablement are you looking to achieve? Historically, Ariba customers have gotten the highest levels of adoption and enablement according to various analyst reports in large part thanks to their supplier network.

Regardless, even if you're thinking that an interim (3 or 5 year) hosted best of breed path is the one you want to take, you owe it to yourself to consider SAP's hosted options -- even if the offerings from a feature, capability and supplier enablement perspective lag the best of breed options (since they often do because SAP partners are using technology (SRM 4.0 or SRM 5.0) which is at minimum, 2+ years behind the times -- and even then, it lagged best of breed capabilities).

Another final question to consider in this debate is the level of services that you want with the hosted model -- do you want the provider to just run the software and charge you on a monthly basis or do you want a completely outsourced solution which includes supplier enablement, catalog management, etc? The levels of service (and experience) differ between SAP's hosting partners in this regard and it's important to do your own due diligence when considering the options.

- Jason Busch

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