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Coronavirus crisis spurs SAP to action — and adds a bit of clarity

04/28/2020 By and

Sometimes in a chaotic crisis, a sense of purpose takes shape and the way forward gets a little clearer.

During the coronavirus disruption, SAP Ariba has been doing that for buyers and suppliers when it opened up its cloud-based service for matching business buyers and suppliers, SAP Ariba Discovery, as well as giving free access to Supply Continuity Pulse, a pre-configured solution to gain visibility into suppliers’ operational status. And on a corporate level, SAP’s realignment of its divisions is being honed and now offers the market a more focused view of its direction.

The “SAP Intelligent Spend Group” had been the broad name used for the last year or so that put SAP Ariba, the workforce solution SAP Fieldglass and the T&E offering SAP Concur together. The structure has recently been refined to put all of the cloud-based procurement functions together into a unit called “SAP Procurement Solutions.” That unit now includes Ariba, Fieldglass and S/4HANA Operational Procurement, the procurement offering from SAP the parent company. Concur has its own leadership outside of the Procurement Solutions unit. (See the org chart below.)

Chris Haydon, President of SAP Procurement Solutions, spoke with Spend Matters about how access to SAP Ariba Discovery showed quick results and helped blend the best of SAP’s human network with its digital capabilities. On March 10, SAP opened access to Discovery so any business could post immediate sourcing needs and any supplier could respond with no fee.

“We could see supply chains tightening,” Haydon said, recounting how SAP decided to make Discovery free. “Signals out of Asia indicated it was time to act.”

The decision came at a chaotic point in the coronavirus crisis. China’s manufacturing hub and the key to much of the world’s supply chains had been under lockdown for weeks, but the shocking spread of the virus was just unfolding. Italy was being overwhelmed with sick and dying people, and it shut down the whole country March 9. The next day Discovery was opened. And the following day, the U.S. announced its travel ban with Europe.

500 hospital beds in 30 minutes

In the days afterward, it became clear that the New York City area was a hot spot for the coronavirus in the United States. Plans were drawn up, and healthcare facilities were being stocked to prepare for the expected waves of COVID-19 patients.

SAP’s Haydon said one of its sales reps got a call from Birmingham, Alabama. A supplier needed to find 500 hospital beds for a makeshift NYC hospital — within the next 30 minutes. Ram Tool Construction Supply was helping a contractor building a temporary hospital for COVID-19 patients in the NYC area, and it had exhausted its supply of beds. An executive from Ram Tool called an SAP sales rep, who searched for the beds in Discovery and found a supplier, Joerns Healthcare, based in Charlotte, North Carolina.

The sales rep had done business with them recently and began texting and calling his contact there. The rep eventually reached a Joerns’ exec, and within about 30 minutes, Ram Tool had secured a deal for 500 hospital beds, Haydon said.

The Discovery process doesn’t typically work that fast, but Haydon credited the SAP worker for responding quickly to use the network and his contacts to help a business.

SAP reports that since Discovery was made free that buyer postings on it have increased by 58% and supplier responses have increased by 404%, as compared to the period Jan. 1 to March 9.

Since then, SAP lists the top five categories for postings as:

  • Medical
  • Computer hardware, software and telecom
  • Lab equipment
  • Construction and maintenance services
  • Security and defense

The supplier response fee for Discovery is waived through June, and Haydon said day-to-day developments are being monitored for what actions to take and whether to extend access further.

‘Suppliers are offering solutions too’

SAP also has stressed the importance of supplier collaboration during the crisis.

“Suppliers are offering solutions too,” Haydon said when discussing the Pulse solution, which also is available for the general public to use during the crisis.

As businesses face disruptions in their supply chains, they need to get in touch with their suppliers to mitigate risks and ensure the flow of goods and services. (Spend Matters’ Coronavirus Response series features seven important categories of solutions to use in the crisis, and the very first category focuses on supply risk management.)

The Pulse solution has a questionnaire powered by Qualtrics, the customer-sentiment survey firm that SAP acquired last year, that lets businesses query suppliers and get a sentiment of the suppliers’ ability to deliver during the crisis.

Since Spend Matters is known for getting intel on technical details, we talked about Pulse with SAP’s Vasee Rayan, Global Vice President, Solutions Management-Business Network at SAP Labs.

“The survey was designed for the buyer to get a quick pulse check on their supplier base,” Rayan said. “We have provided a customizable survey template that can be leveraged by the buyer to initiate with the suppliers of their choice. The survey responses/summary results are only available for the buyer. SAP Ariba does not get this insight.”

Rayan said capabilities are being developed to incorporate APIs for more integration and to add some type of risk assessment scores into Ariba’s supplier risk products. He also said its roadmap includes a follow-up survey with drill-down into further details to help buyers initiate contact with suppliers based on supplier risk.

Spend Matters’ Chief Research Officer Pierre Mitchell lauded the effort to foster supplier collaboration and offered an assessment of the longer-term needs in the market.

“We applaud SAP for bringing its new Qualtrics capabilities to bear on the buy-side for supplier surveys, and especially with this pre-built survey that can help gauge supplier status in a situation such as the current COVID-19 pandemic,” Mitchell said. “However, we’d like to see some basic integration between the powerful survey capabilities of SAP Qualtrics and the supplier management capabilities built within SAP Ariba, SAP Fieldglass and SAP S/4HANA.

“An integrated supplier management solution at SAP is definitely a work in progress, but this best-in-class supplier survey capability that can be seamlessly integrated into SAP’s ‘intelligent spend management’ product suite would be a welcomed piece of functionality — not just for the COVID-19 pandemic but also more generally for mass supplier engagement use cases in many procurement areas.”

(Click image to enlarge)

Coronavirus Response