Friday Rant: Why Shortcomings in ERP Procurement and P2P Will Become Irrelevant in 2012 (Part 1)

2012 will mark a turning point in ERP procurement adoption, upgrades and sales. And no, I'm not just saying this because ERP procurement capabilities have improved to a degree to catch up from a functional perspective with best of breed providers. Based on solutions that were shipping at the end of 2011, there are still material gaps, for example, between the functional capabilities of Ariba P2P and SAP SRM and Oracle eBusiness suite (although Ariba Buyer (CD) development and functional parity lags the SaaS version, ERP and ERP BPO partners are closing the gap here, however). Moreover, folks like Coupa continue to pull away from ERP on both the user interface and overall look/feel fronts, not to mention their philosophical orientation toward capturing all spend through the tool (direct and services included). Yet for a number of reasons, I think these gaps are somewhat -- and ironically, as I'll attempt to show in a minute -- irrelevant when it comes to ERP procurement growth and adoption in 2012.

Let's start with arguably the most important areas holding back ERP eProcurement adoption -- supplier onboarding and supplier management/content management. In this area, both SAP and Oracle have not yet even bridged the gap between their own solid (and often powerful) capabilities in supplier management/MDM and their procurement tools. While it would be a no-brainer to create a targeted variant of Oracle Supplier Hub and Oracle Supplier Lifecycle Management to focus on supplier on-boarding and content management specifically to enable eBusiness Suite and PeopleSoft SRM, these products still must be purchased and deployed separately (the same holds true of SAP's Supplier Management capability contained within its Sourcing On Demand product line).

Yet by using relatively inexpensive tools from ERP partners (and those who are not officially partners yet closely aligned with the ERP partner ecosystem) like BuyerQuest, which put an entirely new frontend to manage the buying and content management experience for Oracle users (displayed at a booth at Oracle OpenWorld), users can actually leapfrog the Ariba buying, search and content management experience within the standard P2P offering. Even SAP is getting in on this act in a very exciting way, but more on that next week. In addition, for supplier onboarding, rumor is that at least one of Oracle's P2P offerings has something up its sleeve.

Aside from the ERPs embarking on creative and fast-moving initiatives internally, as companies like BuyerQuest become better known through ramping their sales and marketing initiatives in 2012 -- not to mention their customers becoming more vocal -- word will get out fast, and it will become a no-brainer for organizations to allocate what will amount to much less than 10% (on a NPV basis) of the cost of a total ERP procurement deployment over five years to get the onboarding, search and content management piece right.

As a final aside until we resume this post next Friday, we'd like to issue some official Spend Matters New Years kudos to Jack Mulloy and company at BuyerQuest and Nitor. The story of their success, from focusing initially on deploying Ariba Buyer, to finally becoming a broader software wrapper around virtually any type of eProcurement system -- not to mention bootstrapping their development costs -- is an awesome one. And success could not happen to a nicer team of folks out to do right by the industry.

Stay tuned as this rant resumes next week.

- Jason Busch

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