SAP Influencer Summit, Dispatch 5: The SAP Procurement Portfolio (Part 2)

Last week I had the chance to get an update from SAP on the latest positioning and solution elements of its overall procurement portfolio. In this post, I'll continue to share what I learned, focusing on providing an update on the provider's latest strategy, which embraces what SAP describes as, "the BPO channel" (semantics aside, some of its partners in this regard are clearly what we've come to think of as procurement-BPO providers, while others look more like solutions providers and marketplaces that deliver hosted SAP solutions). SAP continues to believe that a BPO-partner strategy is key to reaching a material portion of the market (as opposed to traditional direct-sales relationships and indirect SI-consulting-partner relationships).

In this regard, IBM divides its BPO partners in the procurement arena into two categories. The first it describes as "transformational" providers that deliver end-to-end capabilities as part of a broad outsourcing offering. SAP partners in this group include Accenture, IBM, and Infosys. In some of these cases, however, broad outsourcing providers like these may opt not to host SAP technology themselves, but to work with specialists who do (e.g., In the case of Sara Lee, IBM is working with Hubwoo as a technology-hosting provider). The other kind of providers that SAP works with from a procurement BPO perspective are those with a "solution orientation" focused on more targeted areas. These partners include Hubwoo, IBX, and Quadrem.

From my vantage point, I can vouch for the fact that both groups of partners are helping SAP gain further traction with customers that might have chosen other solution providers (especially in the sourcing arena). It is clear that in some of these partnerships SAP has been aggressive in offering capabilities and approaches that go beyond what we might usually expect in such a relationship. It's doing this, it would seem, to encourage partners to work primarily with SAP over other providers with whom these organizations have often worked in the past.

Moreover, SAP appears quite committed to putting corporate development, marketing, and related muscle behind making these relationships work. From assigning some of its top resources to its BPO team to providing marketing support to its BPO partners, SAP appears committed to building a broader ecosystem that extends outside of its SI-focused-partner past. Will it work? It has to if SAP is to overcome the growth limitations of selling primarily into an IT base that has put back-end upgrade decisions on hold. By getting closer to what it describes as BPO partners, SAP hopes to get closer to line-of-business users in the procurement arena, and getting more users into SAP seats (for which SAP may be compensated either directly or indirectly, depending on the particular provider relationship).

- Jason Busch