The eProcurement "Smackdown" Continues …

Over on Supply and Demand Chain Executive, Andrew Reece penned an informative perspective on the recent hailstorm that Abedeen's Vance Checkett's conjured up when he examined the results that Ariba, SAP, and Oracle users realized after implementing their eProcurement systems. In the article, he writes that "one standout finding that Checketts cited is the number of customers of Oracle, SAP, Ariba and other "best-in-class" solutions that had 1,000 or more suppliers enabled. For Ariba, the figure was 20 percent, 14 percent for other "BIC" enablers, and 0 percent for Oracle and SAP." "BIC" stands for best in class, in case you were wondering.

But perhaps more important, Andy cites a comment from a Spend Matters reader that "it is typically more important to look at the percentage of spend captured within an e-procurement system: if 80 percent of your spend is with fewer than 50 suppliers, enabling more than 1,000 suppliers might be a lot of effort to capture relatively small portions of your total spend."

So in all fairness, perhaps SAP and Oracle SRM customers might be achieving decent returns relative to Ariba after all. But still, the fact that not one of SAP's or Oracle's customers achieved 20% enablement -- especially relative to the 14% of users who were best in class – says a lot. Personally, if I were an SAP or Oracle SRM shop and was not happy with the current level of supplier enablement, I would look to third parties to help enable both a greater percentage of spend as well as a greater percentage of overall suppliers. The good news here is that there's no need to "rip and replace" an older ERP SRM system with an upgrade to a more recent version or a different vendor to drive enablement. Rather, companies should look to enhance the capabilities of what they currently have by turning to true expert providers with focused enablement capabilites.

Jason Busch

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