The SAP Business Suite and HANA (Part 3)

This commentary is based on the Spend Matters PRO analysis following SAP's (then-announced) acquisition of Ariba in the summer of 2012.

There is no doubt that SAP HANA will be the database at the core of a future network architecture. SAP Supplier InfoNet was designed from the ground up for HANA to take advantage of many of the types of capabilities we've outlined already in this analysis.

In the meantime, we expect to see the Ariba network gradually taking advantage of SAP's enabling technology up and down the stack, from new mobile interfaces on the user level to greater integration on the connectivity layer.

Spend Matters Prediction: Within the next 2-3 years, expect at least a dozen plug-ins and enhancements to the network leveraging SAP technology. These incremental improvements will precede any major overhaul of the network.

We strongly encourage SAP/Ariba competitors to seriously consider the potential to be outflanked by underlying business network-based technology in the coming years – and to make suitable investments now rather than later from the database level (e.g., HANA, Oracle EXADATA) all the way through to more advanced mobile platforms. Our hypothesis is that when change comes it will be quickly, far more quickly than competitors have historically seen from SAP and Ariba.

Aside from the underlying Ariba network, there are numerous other applications for HANA within SAP's procurement and supply chain application suite. As Bob Ferrari notes on Supply Chain Matters in his recent commentary on the subject:

"The compelling business need of supply chain applications rests in broader and more-timely supply chain wide and B2B business intelligence and predictive analytics. That includes needs for enabling virtual B2B and collaborative sales and operations planning (S&OP) and supply chain control tower processes that synthesize both structured and unstructured information."

For procurement, this will undoubtedly include new types of visibility and predictive analytics to help companies make better total cost decisions (based on ever-changing internal and external factors) in the sourcing process as well as visibility, connectivity and awareness across the multi-tier supply chain into risk elements and opportunities. For e-Procurement and e-Invoicing, SAP SRM and Ariba P2P/Buyer may also stand to benefit from the capabilities HANA can provide – consider predictive analytics around demand and working capital opportunities, real-time supplier offers/discounts, etc.

This will also allow procurement to drive compliance deeper into the supply chain (reference our story on Walmart's current attempts to go multi-tier in their code of conduct, onboarding and ongoing enforcement) and our Spend Matters PRO stories on conflict mineral (3T/G) compliance (here and here.) As a result of this newfound visibility and analytical horsepower, you can drive not only traditional purchase price reduction initiatives and other short-term bottom-line results, but also help drive the top line and guard the stock price at the same time. The sooner you embrace this technology, the quicker we can all move away from viewing procurement as purely a cost center to deliver true best value results.

Jason Busch

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