SAP SRM: Where to From Here?

When it comes to the quality of the SAP uber-marketing spin machine, I must say the ERP giant has done at least a moderately decent job of staving off significant criticism in the broader market from its SRM 6.0 G/A cancellation. Honestly, I expected more of it. Going forward, SAP is looking to quickly distance itself from the 6.0 blunder by unveiling a number of new products. Earlier this week on Spend Matters, Brian Sommer shared his product roadmap notes from the SRM mini-summit which was part of SAP's Influencer Summit in Boston, which took place during the first week of December. In his post, Brian offers up at least some detail on what to expect from the SAP product pipeline in the coming months. Today, I'll offer my take on how we should all read into it.

First, as we have learned with recent SAP procurement product releases, and if we believe history should be a decision guide, we should never trust that SAP will indeed hit forecast product release dates. To paraphrase a quote from Gartner's Debbie Wilson earlier this fall, it's important to make selection decisions based on what is available today -- not where SAP is headed tomorrow. Still, I have a good feeling given that SAP has been working on their spend visibility and Duet-enabled contract management capability for some time, that they will hit the scheduled release dates they suggest. After what happened this year, we can be sure that the entire SRM release program is being micro-managed to the Nth degree inside SAP to insure that the next schedule releases are on-time.

My second observation from reading Brian's notes and discussing the summit with him is that SAP is serious about making a play in the broader procurement world outside of core procurement and sourcing. And their team realizes that in procurement, SAP -- or any other one system, for that matter -- will never be at the center of the overall data and technology ecosystem. One example here of this is SAP's spend visibility xApp, which is supposed to be as systems-agnostic as other best of breed solutions in the market. Another example is desktop-driven Duet contract management integration that leverages the reach and capabilities of Microsoft Office rather than forcing frontline users to work in a specific SAP application. Now, these two examples do not suggest that SAP is as externally focused as an Ariba, Emptoris, Ketera, or many others in the market when it comes to managing and working with suppliers. But it is a step in the right direction.

My third observation concerns how SAP is talking the talk as a market leader, claiming more than 3,000 SRM and nearly 200 sourcing customers (by year end). On paper, these numbers sound great. But in reality, I would like to know the level of usage and deployments versus the number of shelf-ware purchases and seats. My guess is that on the sourcing front, SAP customer usage levels are probably similar to that of other providers in the market. But on the SRM side, I know from talking to many organizations that have purchased SRM seats, that many -- and probably a strong majority -- go unused or under-used to this date. Perhaps the best service SAP could do before SRM 7.0 becomes available in late 2008 (or early 2009) would be to help current customers get better value from what they've already bought. This could take the form of more closely partnering with others around such areas as supplier enablement and change / process management. Steps like this would not only allow SAP to build credibility with procurement organizations, but also set the stage for reasons companies should get in line to upgrade to 7.0 to maximize the returns from their investments based on broader and deeper usage of SRM.

Jason Busch

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