It's Alive — SAP SRM 7.0 in Depth (Part 4)

Continuing with the ever-dry -- but hopefully useful -- journey on the SAP SRM 7.0 procurement superhighway, one of our final refueling stops focuses on the supplier enablement, support and management aspects of the application. Here, SRM 7.0 now includes a number of new supplier portal and self-service capabilities which, while interesting, are certainly not a replacement for the supplier information management capabilities from other providers (e.g., Aravo, CVM Solutions). Still, SRM 7.0 now lets buying organizations create customizable surveys for suppliers to fill out as well as a very basic portal for suppliers to log-on to and nominate themselves as potential vendors to the organization.

There's also some flexibility in surveying, such as the ability to include category-dependent or specific questions. As suppliers change profile information or fill-out surveys, procurement organizations can specify automated updating and alerting. It's all very 2005, but hey, it's better than nothing -- which was basically what SAP had before within SRM in this area.

An important feature that is slightly less ho-hum -- yet still undifferentiated -- is integrated supplier performance management capabilities based on the underlying survey capabilities described above. Companies can use these capabilities within SRM 7.0 throughout the supplier lifecycle, from initial on-boarding and ramp-up through to ongoing monitoring and development activities. They can then roll-this up across users, sites, etc.

One place where SAP SRM still falls short without third-party partnerships is supplier enablement and content management. Despite the advances MDM has made over the years, I still suspect many companies will opt for third-party enablement and content management tools, repositories and search including offerings from jCatalog and Vinimaya (Ariba, despite positioning their own supplier network approach to enablement into the SAP installed-base, appears to have gotten only limited traction at best in this area).

Last year, I spoke to one technology consulting firm that advised an organization in the process of migrating from Ariba to SAP SRM 5.0 only to find that they were forced to hire a number of temporary workers to manage all of the paper that was generated from invoices and other information that had previously flowed electronically through the Ariba Supplier Network (ironically, they could have remained on the network if they desired on a temporary or permanent basis, despite the SAP migration). SAP does not possess a suitable document and invoice management capability that it developed itself, but it does resell a solution from Open Text.

Overall, Spend Matters believes that SAP comes up short in SRM 7.0 without additional partnerships or bolt-on capabilities when it comes to addressing the need to better manage supplier information, supplier performance, supplier enablement, supplier content, invoice automation and additional information/physical paper relative to other best of breed providers in the market. Granted, these should not be grounds for dismissing SRM 7.0 outright, but unlike many of the other areas of the application that now stand on their own as more than sufficient, companies considering SAP SRM 7.0 should look to third-party options to supplement the capabilities that SAP offers in these areas.

In addition, we do not believe there is any advantage to working with selected SAP partners in some of these areas over other best of breed solutions that are not necessarily on the SAP price sheet (yet might offer superior capabilities based on your specific needs). That is, unless you want your SAP rep to have enough money to upgrade to a Cayenne or Boxster S from the base model after closing the deal with you.

Interest piqued in SRM 7.0 but looking to discover what else you need to do to gain greater control over your spend and to generate savings in less than 10% of the time of a typical ERP deployment? Read our latest Spend Matters Perspective: Beyond Requisitioning: Getting Past the Downstream Limitations of ERP Procurement Applications -- Identifying Savings and Working Capital Management Opportunities that SAP SRM, Oracle and other ERP Providers Alone Do Not Enable

Jason Busch

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