SAP Gets Into the Supplier Information Management (SIM) Game

On the second day of SAP's Influencer Summit, the venerable ERP provider disclosed quite a bit about its broader On-Demand strategy, products, and pricing in the sourcing and contract management areas. But from a new-product perspective, it also unveiled an On-Demand supplier information management offering. (This "new" solution is really not so new; it leverages many of the capabilities already resident in the e- sourcing platform.) The result is an offering that companies can purchase independently of -- or in conjunction with -- SAP's sourcing and contract management capabilities. On paper, SAP's On-Demand supplier management capabilities seem to check a number of the boxes that companies are looking for in the supplier information management area.

These capabilities include the ability to onboard and enable suppliers (for SRM/P2P or generally) in a streamlined manner, using forms and workflow to automate as much of the process as possible. The product also lets companies manage supplier profiles, classifications, and a range of information types (e.g., insurance certificates, quality certifications, etc.) And like other solutions in the market, it provides a centralized application for monitoring, administration, and tracking. Central to this latter capability and focus is a supplier performance management capability that in SAP's words, "supports best practice development of suppliers" and, in a not-so-original marketing line, "a 360-degree view of all supplier information." The performance management capability resident in SAP On-Demand supplier management also includes KPI monitoring, tracking, and scoring.

Even though SAP does not get extra marks in my book for originality in describing its supplier management capability, it does win points elsewhere. Knowing the fundamental configurability of the original Frictionless platform, I have no doubt the supplier management product can support significant workflow, rules, and configuration customized to an organization's specific needs (provided its willing to invest the time to do it). SAP supplier management is not a panacea to an organization's need for a single source of vendor truth, however (even though, if deployed properly, it could in theory provide a virtual vendor master).

SAP supplier management data must integrate with both SAP ECC (and potentially, MDM) information, all of which contain additional information stores of transactional history, address, banking and, potentially, other details. The good news is that, given SAP's emphasis on On-Demand integration and interoperability with the rest of the SAP suite, these integration requirements should be less of an issue than if a customer attempted to integrate a non-SAP SIM tool. However, in the case of a heterogeneous systems environment, organizations will still need to think through how best to integrate SAP supplier management information with non-SAP systems, just as they would have to do with any other SIM toolset.

SAP is pricing supplier management based on the number of active users engaged in managing suppliers (vs. the number of suppliers managed or the overall number of users who might access a system). Pricing begins at $175 per month for a single user and drops to as low as $17.50 per month per user when the number of enterprise users exceeds 250. Discounting is available in the case of multi-year deals as well as for those organizations that license other SAP On-Demand components (e.g., e-sourcing, contract management).

Stay tuned for further analysis of SAP supplier management after I've had the chance to dig into the application in the coming weeks and months. All in all, SAP's supplier management capability seems like a clever relabeling and extension of much of the underlying strengths of their E-Sourcing platform. While it may lack some capabilities of the leaders in the supplier management market, it will most likely prove sufficient for organizations looking for a base level of supplier management automation, insight, and capability.

Jason Busch

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