Waiting for SAP SRM -- To Host or Not to Host
But there are other options and I'm surprised by the fact that not all SAP customers are aware of them. One of these is to punt on both the best of breed option and an installed SRM package -- which may or may not be the right decision -- and to go to an outsourced or hosted version of SAP SRM. Hubwoo is perhaps the best-known SAP hosting partner for SRM and SAP reps are in fact compensated based on selling hosted-Hubwoo seats. But there are other hosting partner options -- Accenture, IBM, Infosys and Quadrem are also SAP SRM hosting partners, providing a similar model to Hubwoo. And both Hubwoo and Quadrem also bring ready access to their supplier networks for more rapid supplier enablement and ongoing transaction and document exchange.
How do you know if a hosted SRM option is the right one? Perhaps the first step is to run the math. I've heard, in some cases, of SAP hosting partners being able to take over the licenses that they may have already bought and have sitting on the shelf, lowering the cost materially over other options. Another question to ask is what type of adoption and enablement are you looking to achieve? Historically, Ariba customers have gotten the highest levels of adoption and enablement according to various analyst reports in large part thanks to their supplier network.
Regardless, even if you're thinking that an interim (3 or 5 year) hosted best of breed path is the one you want to take, you owe it to yourself to consider SAP's hosted options -- even if the offerings from a feature, capability and supplier enablement perspective lag the best of breed options (since they often do because SAP partners are using technology (SRM 4.0 or SRM 5.0) which is at minimum, 2+ years behind the times -- and even then, it lagged best of breed capabilities).
Another final question to consider in this debate is the level of services that you want with the hosted model -- do you want the provider to just run the software and charge you on a monthly basis or do you want a completely outsourced solution which includes supplier enablement, catalog management, etc? The levels of service (and experience) differ between SAP's hosting partners in this regard and it's important to do your own due diligence when considering the options.
- Jason Busch
Indeed the alternative of being able to use a hosting or BPO provider to deploy SAP solutions is still little-known and worth clarifying - especially in these times.
One aspect that I would like to clarify is that hosting is not the same as BPO, at least the way I look at it (indeed it might not be the way everyone sees this, but hey...). To clarify even further:
1)In my view, hosting means taking over some degree of operations of the software, but the license (client-owned) and the usage model (mono-tenant) is somehow traditional. The savings come from the operations of the technology stack.
2)in a procurement BPO provision, typically (IBM, Accenture, Infosys and other major System-integration-heritage providers are the archetypes here) the provider implements and runs the technology, and reengineers and runs parts of the S2P process. Either the provider is entitled to use procurement ERP licenses contracted in a BPO-specific agreement with the vendor (to my knowledge the "BPO powered by SAP" model is the only one so far to really do it), or the provider uses the client licenses in a mono-tenant mode (i.e. the implementation is one-to-one) depending on what the client's contract allows. The provider creates synergies across pieces of the technology and process stack, but these are typically single-instance and not multi-tenant, implementations.
3) Hubwoo, and in the near future Quadrem, operate a one-to-many BPO model where the service provision is based on a multi-tenant architecture, where the provider brings to the table a substantially standardized model, but does not engage in massive re-engineering and change management of the client. In this model the provider provides a more limited scope of "labor-based" heavy lifting, leaving the rest of the actual running of the procurement process to the client. These providers indeed benefit from the usage of their own network. At least for SAP, only providers who have a specific "BPO powered by SAP" agreement can obtain license grants directly from SAP for this specific model.
Hope this helps, happy to discuss this further since these are indeed new concepts.
Thanks very much for chiming in. I appreciate your clarification and look forward to discussing in further detail. There's clearly a lot of confusion in the marketplace about what the specific non-installed options are. The key, I think, to getting people to think about this in a simple but elegant way, creating a continuum to explain what the options are, using the degree of customization/configuration as well as process ownership as the key elements to explain the differences in the approaches. One size does not fit all ...