So You've Evaluted SAP SRM 7.0 and You're Not Sold — You Do Have Options …

I heard a line the other day at the Purchasing event in Chicago that when you hear something once it's a point. When you hear it twice it's a line. And when you hear it a third time, it's a trend. Using this rather succinct way of gauging adoption and user technology views, I'd say that there's a clear trend around companies taking a closer look at SAP SRM 7.0 and realizing they just don't want to go there at this point. In fact, I've heard this from three people alone in the past week, including an adviser in the market for whom I hold the utmost respect (and two practitioner organizations in addition).

For various reasons -- including but not limited to back-end ERP upgrade plans -- more and more procurement organizations are realizing that they might be better off holding off on SAP SRM entirely at the current time, staying on older versions or alternative software platforms or developing other options. But to these organizations -- and their advisers -- suggesting various options, I'd make sure not to rule out the following possibilities in your analysis.

To wit, there are multiple paths you can take around SAP SRM 7.0, including going with an SAP hosting partner. I suspect Hubwoo will be the first to come out with a hosted version of SAP SRM 7.0, but I have no doubt that IBX and others will follow fast on their heals. Working with an SAP partner like Hubwoo or IBX can not only take away some of the implementation and supplier enablement challenges by putting the onus on the solutions provider to take care of the messy stuff -- it can also force an organization to standardize on a relatively common set of workflows that they're probably better off using and adopting their own processes to than customizing the heck out of an installed version until they're 3x over their implementation budget. If you're curious to learn more about some of the benefits and shortcomings of the hosted SRM option, check out this Spend Matters Perspective on the subject. The piece is titled SAP SRM 7.0 -- The Wait's Over, But Is It Worth It? Making SRM a Total Cost Success in Your Organization -- Background, Tips, Strategies and Tactics (Plus On-Premise vs. On-Demand Costs and Trade-Offs).

And if you'd like to know similar options around implementing an electronic invoicing or invoice automation capability that goes far beyond what SAP offers today through partnerships, check out this Spend Matters Perspective as well titled Beyond Requisitioning: Getting Past the Downstream Limitations of ERP Procurement Applications: Identifying Savings and Working Capital Management Opportunities that SAP SRM, Oracle and other ERP Providers Alone Do Not Enable.

Now it's time to get back to our regularly scheduled programing. Another logical option for customers evaluating SAP SRM 7.0 is to simply stay on an older version until either they're confident that upgrading makes sense -- and the application is proven -- or until their IT organization pushes through the required back-end upgrades to get the most out of the application (see the above Spend Matters Perspectives for more details on this). SRM 5.0, though a bit of a spend dinosaur relative to the latest P2P capabilities from other providers, is a workhorse that can do the indirect requisitioning job provided you've focused enough on supplier enablement, content/catalog management and user adoption (and you've slotted in other technology to make up for some of its shortcomings in these areas and others). Even earlier versions (e.g, SRM 4.0) might continue to do the trick for some time as well. You might even encourage your IT group to bid out maintenance and support to a third-party besides SAP to get the costs for running your old clunker of an application down further.

But for those companies wanting to maximize spend under management on a near- to mid-term basis that have been turned off by SRM 7.0, it might make sense to evaluate alternative products, most likely those in a SaaS or cloud environment. A short list here is relatively easy to generate. Ariba, Perfect, Ketera and Coupa all come to mind (as do the SaaS P2P capabilities of many of the former exchanges and marketplaces). Granted, I know there are a number of legacy installed Buyer customers who are publicly upset at Ariba right now for various support and forced upgrade reasons, but if you're one of these companies that plans to ultimately migrate to SAP and don't want to pull the trigger now, it makes sense to bite your spend tongue and temporarily move to an Ariba SaaS P2P platform versus upgrading.

Of course this will entail significant change management and integration pain based on how customized your current version is and what systems it's integrated into, but it might be worth it as an interim (read 3 year) solution before you're confident SAP has its act together and/or your IT organization is ready to support you. Just be sure to also invite Perfect, Ketera and Coupa (not to mention Hubwoo, IBX and potentially others) to the table, both to get the best deal out of Ariba and to make sure that Ariba is in fact the right choice (you might find you like another provider, more). But when it comes to getting the best deal with Ariba, they have been known to significantly sharpen their pencil of late, especially in Europe.

Even if you're not overly enthusiastic about doing business with them because of their recent behavior (you know who you are), at least you can beat them down on margin to get back at them (trust me, even in a SaaS world, there's quite a bit of wiggle room provided you come to the negotiation duel armed to the teeth with competitive benchmarks and a true BATNA). And one final negotiation hint with Ariba (and any other vendor for that matter): Q4 is usually a tough quarter for vendors. If you want a deal, finalize everything you can in December. Moreover -- and I know I'm restating this but it's important to hammer this point home -- throughout this process of looking at Ariba P2P and others, you very well might find you like their SaaS competitors as much or more depending on what you value. Leave your decision open and you might be surprised what you arrive at.

What about the other SaaS options I've mentioned above? Most certainly Perfect is a viable SaaS contender, even though they don't seem to get invited to the table much, unfortunately. I suspect this will change in the future as they ramp their sales and marketing efforts (it's not for lack of a competitive solution). Coupa, even though they position themselves for smaller companies, should also be on a short list as well. Ketera is a bit of a wild card and I don't yet have any large-scale references for their new platform. Still, I'd toss 'em into the mix too.

There's half a dozen other smaller providers that are worth looking at as temporary solutions as well. Some offer SaaS as we've come to define it, others offer hosted versions of installed solutions (i.e., not multi-tenant but dedicated hosting). But these might also be worth checking out. Some names include Basware, Bellweather, and PurchasingNet (not to mention ePlus and SciQuest, depending on what industry you're in and how much you want to reward, in the case of the former, abuses of our patent system).

Regardless, when it comes to SAP SRM (and SRM 7.0, specifically), remember that you have many other interim solution options available, from staying on SAP and working with an SAP hosting and supplier enablement partner to migrating on an interim basis to a best of breed SaaS eProcurement or P2P

solution. Don't despair. Don't fret. Get smart on the universe of options that might work for you and build the right business case to take action.

Jason Busch

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