Sapphire Dispatch 5 -- A Strong Collaborative Vision (with a Questionable Reality)

I'll preface this post by noting that I believe it's always a good thing when procurement lands on center stage during an executive keynote covering dozens of topics aimed at diverse IT and business users. And our corner of the corporate universe was again featured on the mainstage -- as it was last year -- when it was highlighted as a case example by Henning Kagerman earlier today about how SAP intends to drive innovation. This time around, Kagerman featured a scenario using a future SAP toolset called Collaborative Supplier Management. According to Kagerman, Collaborate Supplier Manager will enable companies to facilitate the "on-boarding of new suppliers" as well as managing the lifecycle of suppliers from an operational perspective, providing "more strategic insight into the supply base". It will provide "central supplier master data management" and integration that is fully integrated with SAP SRM 7.0 and supplier systems. It will "ship next year" as a separate SAP procurement offering independent of SRM.

Kagerman ran a demo of this new application on mainstage screen, showing a hypothetical case of an expiring purchasing contract. Then, following a single click, our trusty procurement manager (or the CEO of SAP, in this case) drags and drops information about the contract onto his desktop and brings in additional information including product specifications and further information on the supplier. But to highlight the value of external information, the application also allows a user to look for alternative suppliers. This is where the demo broke with reality.

We learned at this point that the system would pull in information from Alibaba, allowing a user to gather supplier information such as pricing, quantities and other information from this third party network. It then presented this information in a cool, simple dashboard environment. But if SAP knew anything about how companies actually use Alibaba, they'd know the directory is essentially a way to find general supplier information (or, more likely, trading companies who serve as fronts for suppliers and mark-up items accordingly). Alibaba certainly does not provide a way to drill down on detailed specification and pricing information (with price breaks) within its directory. A better scenario would have been integration with MFG.com, D&B supply risk data, CVM Supplier Locator (for diversity suppliers), the Ariba ASN or dozens of other sources of vetted supplier information versus the simple advertisements and directory listings within Alibaba.

Alas, SAP should have done some fact-checking about how folks actually do global sourcing before putting this on the main stage (another nit: the application does not appear to do anything about traditional supplier on-boarding as Kagerman suggested). Still, I commend them for their vision with the Collaborative Supplier Manager product (provided they can actually bring it to market within the window they've specified). Let's just hope that those who will be building it in the next year are getting requirements from those who actually manage suppliers and sourcing for a living -- and know the limitations of the information contained in trading directories like Alibaba.

- Jason Busch