Catching up With Duncan Jones on the SAP/Crossgate Acquisition

Despite my travels in the fall, I often have the good fortune to encounter Forrester's Duncan Jones during this busy season of conferences and speaking events. Duncan and I both cover this sector closely and although our views are not always identical, I always respect his analysis (which, in person, is often dished out with a creative sarcastic punch line every 20 minutes or so). In a recent guest post on Procurement Leaders, Duncan shared a few thoughts on SAP's recent acquisition of Crossgate (you can read our analysis here, here, and here). In this post, Duncan raises the question about "one aspect [of the acquisition] that warrants deeper consideration is whether the acquired employees will be able to influence SAP's approach to the important issue of how buyers and suppliers work together, or whether SAP's culture will prevent any significant change." This is important because today, SAP has largely taken what Duncan refers to as a "buyer-centric approach" that "forces suppliers to connect separately with each of their customers."

In contrast, Duncan introduces the "network-centric" connectivity model that enables " a many to many community of buyers and suppliers." Actually, it's often a one-to-many approach in most cases (e.g., Ariba) because of architectural limitations in being both a buyer and seller on the same network, but I'll leave that point alone. What's more important is the business model and why a networked approach makes more sense. Here, Duncan suggests he favors the network model and uses the analogy of mobile phone networks to compare proprietary and point-to-point supplier connectivity approaches vs. network-drive ones.

Duncan notes regarding mobile phone networks, "the current situation is as if we have to carry dozens of separate phones around with us, one for each of the customers that might call us up. I want to be able to send my purchase orders to one B2B provider and have it forward them to all the networks that my suppliers have chosen, just as I currently call them from a T-Mobile phone and they answer from a Vodafone service. I don't want one dominant network that can charge extortionate fees, nor do I want dozens of sub-scale providers that won't work with each other."

In other words, Duncan hopes that SAP moves in this network-centric direction. And I do as well, embracing the broader Crossgate capabilities as well as its Hubwoo relationship to drive networked models across its SRM base (and eventually sourcing and supplier management base).

- Jason Busch