Spend Matters Perspectives: SAP SRM 7.0 — The Wait’s Over, But Is It Worth It?

Some of the best-read columns I've penned about eProcurement on Spend Matters have been focused on SAP SRM. And in the past year, many of the questions I've gotten from practitioners and consultants working in the field with eProcurement systems have centered on whether or not to move to SAP from another provider and/or what to expect from SAP SRM 7.0. These discussions got me thinking about the importance of researching and writing a Spend Matters Perspective that investigates SRM 7.0 in detail, providing historic and solution context, relatively detailed product information and high-level pros, cons and costs of different deployment models. Granted, there's only so much that's possible to capture in a single 7-8 page analysis on the subject. But a few months ago, I set out to try my hardest to see what I could come up with.

One of my major discoveries in the process -- and a turning point in my SAP SRM analysis -- came at SAP Sapphire this year during a presentation given by Graham Packaging on their experience with On-Demand deployment of an earlier version of SRM (following a migration from an installed instance). At the time, I reported "Initially, Graham went live at 6 facilities, but had rolled SRM On-Demand out to a total of 62 by the following month. They now have 850 suppliers integrated into the system, representing approximately $200 million of spend (spread across 100 facilities). This represents a huge improvement from their previous internally installed efforts where they were only to implement 35 supplier catalogs and push $30 million through the system (and it took them 2 years to implement 200 suppliers). This resulted in less than 10% of their spend coming from selected catalog items (relative to 81% with ... [an] On-Demand solution)."

These numbers -- and my subsequent follow-up discussions with a number of SAP employees, customers and partners -- were shocking. To sum it up, I discovered that many of the shortcomings of SAP SRM that companies often found during on-premise deployments (e.g., supplier enablement, document exchange, etc.) were for the most part remedied by leveraging an On-Demand deployment model. This analysis paved the way for some of my early thinking when I began to dig into SAP SRM 7.0 in more detail. Last year, I was hired as an adviser to look at SAP SRM for a number of companies (including consultants and outsourcers) so I already had a good frame of reference for what was planned for the ramp-up version and the subsequent general release.

In the end, I was able to leverage much of this earlier research (and my more current analysis around On-Demand SRM) to author this Spend Matters Perspective. After reading it, I would hope that companies -- not to mention their consulting advisors -- will have a better understanding of what it takes to make SAP SRM 7.0 a total cost success factor inside their organizations and under what circumstances it makes sense to push forward with an investment in the area (either in lockstep with -- or without, as readers will learn -- IT's own ERP upgrade schedule). If you're curious to learn more about what's included in SAP SRM 7.0 and how to gauge the total costs of implementing such a solution in both installed and hosted models -- not to mention the relative advantages and disadvantages of the On-Demand model -- then I'd strongly suggest downloading this Spend Matters Perspective today.

Jason Busch

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