Why an SAP and BI Approach Alone is Not Enough to Manage Supply Risk

Last week, I came across this rather verbose and not terribly informative article from Inside SAP that takes many pages to essentially say one thing -- SAP alone is not a reasonable option to manage supplier or supply chain risk. Even though it's possible, as the article suggests, to capture a handful of key metrics from your own systems that an organization can quantify to better understand supplier quality, financial, customer and reputation impacts on its business, saying ERP-driven BI solves the supply risk equation is like saying ERP-driven BI solves the spend analysis challenge. It's simply not true.

In my view, if SAP is going to get serious about helping customers understand the true benefits of supply chain risk management, it must realize that supply risk is as much about managing information that originates from outside the four walls of the organization (e.g., supplier financial information, accreditations, certifications, peer review, third-party audit, company/individual watch lists, etc.), versus just the type of information that originates from within. Until its systems can economically begin to include this type of information, SAP is better off staying out of the supply chain risk management game entirely, leaving it to companies who better understand -- and can deploy -- affordable solutions that give equal weight to internal and external metrics.

Jason Busch

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