Earlier this week, I had the chance to meet with a number of Oracle team members at all levels of their solution organization, within procurement and Spend Management. Some of these personalities I've known for a decade, including David Hope-Ross, who used to sit in my position when I was briefing him as a Gartner analyst during my time at FreeMarkets. Of course, while it would be fun get back at David for his critical quadrants and write-ups of my organization at the time, the actual truth is that for the first time since starting Spend Matters, I'm actually quite impressed with the overall direction of Oracle in the Spend Management world. In fact, I believe they're approaching or surpassing SAP in certain areas, such as their new approach to supplier management and a do-it-yourself classification engine, which eliminates the largely black-box approach of many others in the market. It reminds me of Spend Radar in this regard.
Moreover, Oracle's solution interfaces put SAP to shame (outside of Spend Performance Management) and overall usability across their source-to-pay spectrum is up there with some of the better "best-of-breed" providers. One thing that impresses me about Oracle relative to SAP is the overall cohesiveness of the team. SAP is running in multiple directions with their procurement, sourcing and spend analysis products with and solution leadership groups. Each area ranges from excellent (e.g., Spend Performance Management) to wanting in terms of vision. This is directly reflected in the solutions as well (e.g., Spend Performance Management is clearly a stand-alone one-stop-shop solution while SRM has numerous functional gaps, requiring third-parties to address).
Now, Oracle isn't perfect, either (for example, they highlighted their own solution gap in invoice automation in April, announcing a new partnership). But they're reacting to gaps in the market faster than before and either developing or enhancing organic solutions, or filling them with partnerships based on differentiated solution providers. For example, SAP's Open Text partnership is a great example of a joining in the invoice automation space that checks the box on some functionality but misses the boat on critical elements of EIPP electronic invoice presentment and payment that would allow it to better compete against Ariba, Basware and others.
Take the area of supplier information management and compare SAP and Oracle's different approaches. Oracle recently released a new toolset that takes advantage of its significant capabilities within customer data integration (CDI) to create a truly unique offering in the market, allowing companies to gain a unified view in real-time of different supplier information elements. SAP, in contrast, broke out and slightly enhanced capabilities that used to be included for free in the Frictionless e-sourcing toolset, and started charging separately for them as a different module. This, of course, is not exactly a recipe for innovation, let alone keeping customers happy and loyal to SAP technology in a critical new procurement and supply chain area.
Don't believe for a minute that I'm going soft on Oracle. They still have many hurdles to jump over to catch best-of-breed competitors, let alone sell solutions that would appeal to companies without an Oracle back-end on a regular basis. But if they can continue down their current procurement path and make targeted acquisitions (both financial and strategic) along the way, I suspect that we'll see them pull ahead of SAP from an overall solution footprint breadth and solution depth basis in the coming years. Of course from a customer perspective, this point is almost entirely moot (since Oracle and SAP rarely ever compete against each other for procurement deals except as part of broader ERP selections). But it's certainly interesting to watch and comment on their comparative solution evolution from the sidelines.