Hubwoo and SAP Look Forward — Which Dog is Wagging Which Tail? (Part 2)

Please click here for the first post in this series.

One thing that is clear in looking at Hubwoo's customer momentum around the SAP product set is how the vendor is benefiting from general SAP adoption trends in the broader source-to-pay area. Some of the customer names Hubwoo shared at the event, including Campbell's, Caterpillar, Grace, Lloyds, Bombardier, Marathon, Rolls-Royce and Sigma-Aldrich, seem typical of large organizations moving down the SAP procurement adoption path. However, it's important to note that these companies are being strategic in not pursuing an "SAP only" strategy. One of the bigger names on the list, above, for example, just selected a third-party VMS (services procurement) platform over the limited services procurement capability offered by SAP and Ariba (which the company has historically used for part of its procurement programs).

More important, it's necessary to understand why some of these bigger name users are becoming attracted to the SAP/Hubwoo joint solutions. One reason, most certainly, is the growth of the Hubwoo network and its relatively low price points compared with Ariba (and the ability of buying organizations to pay all suppliers fees on a heavily discounted basis as an option). The Hubwoo network is currently growing faster (on an organic basis) than Ariba's in terms of supplier adoption. At the end of 2010, Hubwoo stated that they had 130,000 active suppliers transacting on the network (up from 70,000 in 2009). This number jumped to 200,000 suppliers during the first half of 2011.

The marketing copy Hubwoo shared at the event (aimed toward suppliers) is almost an exact copy of how Ariba positions the benefits of their network. These positioned benefits include gaining visibility into the "real-time business and transactional status" of relationships, streamlining the order-to-cash process, reducing DSOs, and marketing to "thousands of enterprises, including the global SAP customer base." In this last regard, the supplier profile pages on the network not only include background demographic/product detail on what suppliers offer, but also ratings based on such areas as diversity, invoice accuracy, on-time performance and overall customer satisfaction. In the future, Hubwoo's product roadmap calls for new "network tendering" options to help drive new business over the network for suppliers, network financial vehicles to optimize cash and an expanded "360 degree view") of business information for network participants.

As part of the Hubwoo network offering that is resold by SAP, Crossgate (becoming part of SAP following the close of a pending acquisition) will continue to play a connectivity role. Specifically, Crossgate will continue to resell Hubwoo's supplier community and portal infrastructure and Hubwoo will use the SAP Information interchange by Crossgate as "its standard B2B integration technology in order to provide productized SAP application connectivity and simplified enablement of integrated suppliers."

As another component of its network strategy, Hubwoo will continue to provide greater visibility to suppliers, including invoice status information, "independent of the various delivery and receiving services including portal, fax, paper, etc." As part of this solution model, Hubwoo presents structured customer status information for all supplier invoices via a portal (which Hubwoo handles the supplier onboarding for). This capability to drive self-service inquiries also includes alerts, dispute management and PDF upload capability for the SAP Invoice Management Solutions. As part of this portal offering, suppliers can also change their vendor master data information by seeing and updating profile details, which are then (following routings and approvals by the buying organization) published back into the SAP ERP/ECC instance.

Stay tuned as we conclude our deep-dive into Hubwoo's and SAP's combined solution strategy in the final post in this series.

- Jason Busch

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