Yesterday, I had the chance to sit in on a breakout session that focused on the source-to-pay lifecycle within the SAP product suite. The primary agenda of the presentation was to lay out a vision for the future of SAP's E-Sourcing application. In this post, I'll plan to share the details and offer up a bit of analysis (with more to follow in later posts). So without further adieu, let's dig in. To begin, the next major E-Sourcing release cycle will come in Q3 2009 when SAP re-engineers the E-Sourcing application by providing tighter process integration with SAP ERP and Enterprise SOA. From an architectural standpoint, this release will include linkages into MDM as well as purchase requisitioning and RFX -- and the ability to more closely tie awards and purchase orders as well as linking master agreements to operational contracts. Functionally, this release will deliver significantly enhanced usability (the Frictionless UI traded elegance/ease of use for configurability), support for complex pricing structures and dutch auctions. It will also offer integrated sourcing processes to drive better collaborative scoring of responses with an RFX and cost breakdown capabilities to support complex pricing.

Following this release, the next major E-Sourcing enhancements will come in 2010 -- if SAP sticks to its own roadmap. At this time, SAP will focus on coupling process integration between E-Sourcing and their overall Business Suite contract management capabilities to enable "complete contract lifecycle management". Additional functional enhancements will include multi-envelope bidding (for the public sector in Europe, allowing the separation of commercial and technical terms) as well as more advanced bid evaluation and optimization capabilities. The 2010 release will also add integrated sourcing processes including tighter integration between the overall SAP business application suite and sourcing (laying the groundwork for SCM and PLM integration further down the road). It will also provide capabilities around design to source (linking the R&D and sourcing roles) as well as general, additional functional enhancements to stay at parity -- or ahead, SAP hopes -- of the general market.

The next general release on the current roadmap is slated for 2011 when SAP will continue to provide functional enhancements including the tight integration of SAP PLM and SAP SCM as well as industry specific business processes. Throughout all of these releases, SAP's guiding principles are to:

- "Adopt modern integration architecture (enterprise SOA for SAP E-Sourcing/SAP ERP process integration)
- Enhance functional competitiveness of SAP E-Sourcing on advanced sourcing processes
- Deliver competitive integrated sourcing process, supporting complex categories and business suite value scenarios"

Stay tuned for further posts detailing the new interface as well as how SAP will integrate Business Objects into new dashboard-like interfaces for the E-Sourcing and spend visibility-like applications. But for now, what's my net take? SAP continues to be serious about sourcing. And the Frictionless acquisition not only made sense in retrospect -- it was a lucky move given the timing of the SRM 6.0 release issues. But SAP must still figure out a market message that better explains how SAP E-Sourcing users (and data) will interact with the sourcing capabilities resident in SAP SRM -- especially the complex operational sourcing/bidding capabilities SAP SRM 7.0. Right now, there's too much confusion -- even internally within SAP -- on the subject. For those who are not familiar with the SAP solution architecture, SAP E-Sourcing and SAP sourcing within the SRM module are different applications although some functional overlap exists between the two (the SRM sourcing product has its strengths, especially within SRM 7.0). At least one other SRM product, contract management, also has confusing overlap as well within the broader SAP solution suite.

- Jason Busch