SAP's E-Sourcing Transformation: Part 3 -- Just the Product Facts
At Sapphire, SAP announced it would offer two different sourcing products: SRM sourcing (which is part of the SRM 6.0 / 2007 release) and E-Sourcing. The later is available in both an On Demand subscription-based model as well as behind-the-firewall software -- although with some limitations, as the legacy Frictionless architecture can only support certain configurations and databases, unlike the rest of the SAP business suite. Previously, SAP had sold this product as "Enterprise Sourcing Plus", which represented the entire Frictionless suite of capabilities including contract management. They have done away with the former "On Demand E-Sourcing" and "Enterprise Sourcing" variants of the Frictionless product (which took away functional capability in exchange for lower price points).
And no longer is SAP offering a cheap, multi-tenant version of E-Sourcing (previously the "On Demand E-Sourcing" variant was supported by multi-tenant hosting). Going forward, all deployments -- even On Demand ones, which SAP is focused on selling -- will be based on a single tenant deployment model. Later this year as SAP unveils new enhancements to the E-Sourcing product, you can expect additional support for contract management in the form of enhanced contract authoring, more extensive clause management, clause searching, and an enhanced workflow around the modification of contracts. And of course Duet integration will be available in Q4 as well in the E-Sourcing suite.
Ultimately, in Q3 2008, the E-Sourcing and SRM sourcing products will converge on a single architecture. However, even at this point, it's not clear if MDM will serve as the underlying data store for all procurement and sourcing data as it extends out to spend analytics and areas such as supplier performance and risk management. Until it does, I'm counseling users to hold-off on a forced MDM upgrade from older SRM versions since it will be better to let early complete suite adopters such as Merck -- who have huge budgets to spend on implementations -- teach SAP how to improve upon the initial release and get it right (if anyone has the money to spend being a guinea pig, it's a giant pharmaceutical company). Also, given the vendor's history of missing application delivery dates, the conservative SAP procurement buyer would do well to make decisions based on what is available today -- not what is promised down the line. Still, it's an exciting vision if they can execute within the promised timeframe.
Jason Busch
And no longer is SAP offering a cheap, multi-tenant version of E-Sourcing (previously the "On Demand E-Sourcing" variant was supported by multi-tenant hosting). Going forward, all deployments -- even On Demand ones, which SAP is focused on selling -- will be based on a single tenant deployment model. Later this year as SAP unveils new enhancements to the E-Sourcing product, you can expect additional support for contract management in the form of enhanced contract authoring, more extensive clause management, clause searching, and an enhanced workflow around the modification of contracts. And of course Duet integration will be available in Q4 as well in the E-Sourcing suite.
Ultimately, in Q3 2008, the E-Sourcing and SRM sourcing products will converge on a single architecture. However, even at this point, it's not clear if MDM will serve as the underlying data store for all procurement and sourcing data as it extends out to spend analytics and areas such as supplier performance and risk management. Until it does, I'm counseling users to hold-off on a forced MDM upgrade from older SRM versions since it will be better to let early complete suite adopters such as Merck -- who have huge budgets to spend on implementations -- teach SAP how to improve upon the initial release and get it right (if anyone has the money to spend being a guinea pig, it's a giant pharmaceutical company). Also, given the vendor's history of missing application delivery dates, the conservative SAP procurement buyer would do well to make decisions based on what is available today -- not what is promised down the line. Still, it's an exciting vision if they can execute within the promised timeframe.
Jason Busch
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Just as an aside, it's my view that SAP is pushing the On Demand variant until the installed one is as flexible from a database / app server / and general systems deployment perspective as the rest of their suite (right now, it only runs in a limited number of environments such as requiring Oracle). However, from what I hear in the market, they're having success selling the installed version currently as well. Long term, I'd bet that 50%+ of new SAP Sourcing deals start with On Demand, but that 80%+ of revenue (software + maintenance) becomes tied to installed license sales. After all, if you have a recipe for success, why change it?
# Posted By Jason Busch
| 4/30/07 5:26 AM
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