SAP Spend Performance Management: Supply Risk Meets Spend Analysis

For years, SAP and Oracle largely punted on the spend analysis area, providing a large opportunity for other vendors to gain a foothold inside companies in a critical Spend Management area. In the past two quarters, however, both SAP and Oracle have gotten serious about releasing entirely new spend analysis tools that acknowledge the need for looking beyond just ERP systems data and dumping raw information into a data warehouse. SAP in particular has moved past solving basic multi-system and source spend data challenges, which they now accomplish through a combination of SAP extractors for ECC and SRM as well as a data integration ETL capability for non-SAP systems, not to mention support for integrating third-party data feeds. Now, SAP enables a full range of standard spend analysis capabilities (e.g., classification, standard reporting, etc.). In addition, they also offer differentiated capabilities that incorporate a range of supply risk elements into the spend analysis equation at the line item level (i.e., enabling companies to understand risk factors for specific parts, components, services, etc.)

With SAP Spend Performance Management, users can rapidly drill into supply risk at the category, supplier and item level, all from a single launch screen. What's most unique about this approach is that SAP is leveraging a combination of third-party enrichment data as well as a given company's own information to provide a more accurate and complete view of different risk factors in the supply chain -- all in the context of what they're actually buying versus only who they are doing business with on an aggregate level. These combinations of being able to look at line item spend details and either roll-up or roll-down a combination of financial, operational, performance, legal and other risk factors is unique. Granted, it's not perfect. SAP's performance management and scorecarding capability included in Spend Performance Management leaves quite a bit to be desired relative to best of breed providers in the this area, like BravoSolution and Emptoris. Still, the overall innovation coming from this package is more than impressive, especially given that SAP is behind it.

If you're curious to learn more about SAP Performance Management and other supply risk, supplier information management and spend visibility approaches and providers in the market, you can download the two latest Spend Matters Compass Research briefs by clicking the links below:

Beyond the Basics: Using Spend Visibility to Drive More Than Category Sourcing Strategies and Spend Reporting

The Intersection of Analytics and Supply Chain Risk Management: Using Intelligence to Drive Early Intervention

Jason Busch

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