Friday Rant: Three Reasons ERP Procurement/P2P Gaps Will Become Irrelevant in 2012 (Part 2)

Please click here for the first post in this series.

In the first post in this rant, I came out swinging at a fastball coming right down the middle of the Spend Management systems plate with a prediction that is pretty hard to get wrong. Prescient? Maybe not. But no one else has said it yet, at least as far as we can find. And that's the fact that nearly all of the most important shortcomings in ERP procurement and P2P are likely to become irrelevant starting in 2012. The second argument I'll make in support of this discussion is focused on yet another major area where ERP procurement has traditionally been rough around the edges in the past -- the general user experience.

In 2012, Spend Matters believes that advances by third parties (and ERP providers, in the case of SAP) in making the ERP UI largely irrelevant for tactical buyers (and most users within procurement, for the majority of their activity as well) will render best-of-breed advantages obsolete. Or, perhaps on the other hand (stay with me here for a minute), third-party interfaces and shopping applications will simply become the front-end to ERP procurement in the majority of new cases.

Let's take the SAP world as an example. SRM 7.0 has come a long way from the highly cumbersome 10+ clicks to buy in most early configurations (you might need to double that estimate in certain deployment cases depending on how much the SI fussed with the search, buying and checkout process). But the standard UI within SRM 7.0 remains anything but an application your parents, who are now used to texting, Amazon and Facebook, could walk up to and use without training, especially if they were only occasional buyers within a company.

In 2012, I think these limitations will be irrelevant. And that's because there will be close to half a dozen options, by my count, for those wanting to re-skin SRM with an entirely new UI. From the work Simplifying IT has done on its own to Hubwoo's on instance and integration of Simplifying IT in their own cloud version of SRM to CapGemini's and IBX's new UI experience -- both of which address a number of other search and shopping challenges by necessity -- SAP users will have numerous options in the official SAP "partner" ecosystem to go with. Further, it doesn't take much of a stretch of the imagination to consider how a Coupa front-end to SAP SRM could solve similar issues, and then some, providing a means for companies to dramatically accelerate the spend flowing through their ERP eProcurement toolset.

But perhaps the most interesting development is that SAP will be coming up with its own new re-skin of SRM in the form of a usability pack later in 2012 (the UI is currently in beta with a number of customers). Users will need to be on SRM 7.0 to take advantage of the usability pack, but those that upgrade to it will be greeted with a new interface that is ahead of where Ariba's UI is in the market in certain areas (e.g., catalog search, sort and filter), and even some SAP partners that have created their own new interfaces. While I'll save the details of this new re-skin for a specific post series, it's worth calling attention to some of the general enhancements it presents, including a simple interface/ability to sort items, conduct cross-catalog searches, see products via new visualizations (e.g., preference/activity based tag clouds), rank/rate items to gain easier visibility into product attributes/visuals/details and to search for items in a range of manners (including a widget concept outside of the application browser window itself). In short, SRM no longer looks -- or acts -- like an SAP application of old.

The third and final reason we believe the limitations of ERP eProcurement will become irrelevant in 2012 is linked more closely to the evolving dynamics of the procurement ecosystem than anything else. First and foremost, we believe that 2012 will mark the year when CD customers that bought into Ariba's gestures of reconciliation starting in 2010 will grow impatient with the continued release lags of on-premise/CD and SaaS versions of the tool, especially when they see that SAP has leapfrogged Ariba in basic front-line usability. This combined with maintenance fees and supplier network fees will make the economics of pursuing either a direct migration to ERP eProcurement -- with the necessary third-party tools to ease the transition -- or a temporary migration to a hosted or cloud variant of ERP eProcurement an easier decision to make, especially in the context of financials upgrades.

Granted, this says nothing for Ariba P2P "cloud" customers, which represent virtually all of Ariba's new deals and expansions. But for an increasing number of CD users, we believe the stars are likely to align in 2012 to make the switch to ERP that much easier. We suspect that once Ariba Buyer users begin to see the new front-ends they can put on top of ERP tools -- especially from those who know Ariba Buyer intimately, like the folks at BuyerQuest, who used to make their living rolling out Ariba CD customers -- that they'll be more than pleasantly surprised at the possibilities.

- Jason Busch

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