Forrester rips SAP Ariba in its latest E-Procurement Wave

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The Spend Matters team has known Duncan Jones, the lead author of Forrester’s latest E-Procurement Wave, for just about as long as the average technology solution provider in this sector has been in business. Duncan is known for trading humorous barbs with Jason Busch, Spend Matters’ founder, at various industry events with his typical acerbic British wit.

However, there is nothing humorous about Forrester’s latest Wave when it comes to singling out SAP Ariba for failing to live up to its past prowess, especially in the technology area. The report, which various SAP Ariba competitors have requisitely licensed for download, places SAP far below other vendors that it primarily competes with in the e-procurement market. This includes Coupa, Ivalua, GEP, Jaggaer, Basware and others. In fact, Forrester puts SAP in the same third-tier “Contender” ranking wave as Workday and Infor — two vendors that are appropriately not known for e-procurement capabilities (especially for indirect) relative to best-of-breed competitors.

Offering a strong opinion

Within the report, Forrester rates SAP Ariba’s core “Technology” the lowest possible rating, a “1” — in comparison, it rates both Coupa and Oracle a “4” and, interestingly, Tradeshift a “5.” Many other “Current Offering” SAP ratings are below the benchmark rating average as well (e.g., “Approvals”).

But it is Forrester’s words that speak as directly as the Wave chart and the underlying scoring when it comes to SAP. Here’s an excerpt: “SAP Ariba’s outdated architecture, combined with years of inconsistent leadership and excessive churn within product management, has taken its toll.”

Forrester says the product is still good but has fallen behind competitors in many ways, and it reports that it has talked with SAP Ariba customers past and present. Current ones are happy but did not shop around, and customers that “migrated from it cited many deficiencies,” Forrester says.

On Forrester’s point about the degree of personnel churn inside SAP Ariba, we can validate that observation. The churn is a reality within both the product management function (the “applications” and “network” side of Ariba) and its executive leadership. Hopefully SAP Ariba can stabilize the management ranks, boost morale and double down on product development. The original applications (Buyer) and network teams were some of the best in the history of the market.

Speaking of product, we’ve also talked to many SAP Ariba customers who were not provided to us through a formal reference process (we actively campaign and collect practitioner references to participate in our SolutionMap customer scoring process in return for premium research), and while they’re by no means universally “happy with it” product-wise or with other issues of integration, costs, hitting promised delivery dates, etc. (which is not a symptom of just SAP Ariba), they do want SAP Ariba to succeed on many levels from both a procurement and IT standpoint.

Spend Matters View

While we will refrain from passing judgment on Forrester’s ratings and methodology, we would be remiss if we did not call attention to the publication of this report, which is why we published this note. Whether Forrester is wrong or right of its judgment of SAP and others in E-Procurement, it is always respect-worthy of an analyst to make such a call, especially if there’s commercial pressure from within to not be too harsh on a valued client. But it is also important to question what data an analyst is using to form an opinion or to place a circle on a chart. This is something we would encourage readers to ask of any analyst firm if they intend to use the report to help drive any real commercial decisions involving SAP Ariba.

Our methodology is extremely transparent, and readers can find it here. Spend Matters analyst and customer ratings of SAP Ariba can be found in SolutionMap where we evaluate over 750 requirements across six areas: E-Procurement, Invoice-to-Pay, Sourcing, Contract Lifecycle Management, Analytics, and Supplier Relationship Management & Risk) and three suite views (P2P, S2P and Strategic Procurement Technology). SolutionMap is by far the deepest solution intelligence database in existence that can be used to objectively assess the performance of all the major procurement solutions in the marketplace. And our persona-based graphical maps can be downloaded in these areas on our website here.

We also encourage procurement practitioners, consultancies advising them and others going through a technology selection or evaluation of SAP Ariba (or more broadly, any Intelligent Spend Group offering, which includes Ariba, SAP Fieldglass and SAP Concur) to contact the Spend Matters team.

The Spend Matters team now comprises seven technology/industry analysts and three data analysts on both sides of the Atlantic, including our most recent addition, former Gartner analyst Magnus Bergfors. We’re happy to share our perspective on SAP Ariba and SAP more broadly in procurement from the hundreds of technology selections that we’ve been a part of, as well as the quantitative analyst and customer ratings data underlying SolutionMap. Our niche is separating out expert and data-driven product, technical and customer analysis, being as deep and transparent as we possible at the same time.

We also look forward to sharing our refreshed analysis of SAP Ariba’s capabilities in early 2020.

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Voices (2)

  1. Jason Busch:

    I tend to agree most with Bob Solomon’s history lesson (Bob, I think DHR wore camouflage army attire to the “Problem Watch list” review meeting with Ariba).

    Fast forward to today and my view (not Spend Matters!) is that while SAP Ariba could have done a lot more in recent years (innovation, customer engagement, a more universal supplier friendly model, etc.), you need to take all comparative traditional analyst efforts such as The Wave with a grain of salt, especially at the aggregate chart level. It’s the underlying data that can be actually useful to apply to shortlisting, selections, comparative analysis, etc.

    In this regard, while SAP Ariba is aging more like a Chianti rather than a Barolo, our 50X more granular (and validated/transparent) Spend Matters SolutionMap data would suggest its e-procurement modular capabilities and capabilities do not deserve such a comparatively low set of functional ratings (nor the technology score Forrester gave it). I really don’t understand some of the scores on a comparative basis even if there must be logic to them, but to each analyst his own.

    The bigger question strategic question for SAP and SAP customers is re-platforming Ariba on S/4Hana. The micro-services notion of financials integration and platform-based partner app integration for SAP (referenced in the report) is not the same, not even close. Real Ariba-level S/4Hana procurement cannot come a moment too soon for S/4 financials customers. As for ECC integration scenarios, SAP Ariba may be a good shortlist choice, but there are other choices which can integrate quite well, which should also be considered even within stalwart SAP shops.

    Finally, I’d wager on a DCF-driven valuation and earnings basis / forecast, thanks in large part to the margin on the network revenue I suspect (hat-tip to Bob), SAP will have more than gotten its $$$ worth with Ariba over a 10 year projection period (2012-2022) even if the legacy stack(s) is eventually sunset, outside the network (with new apps on top of it). This was still likely a very good deal for SAP in retrospect financially, industry analyst commentary be dammed!

    Comments/speculations are mine, not Spend Matters.

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