In this column, we’ll explore SAP and Oracle’s supplier information management tools, which enable companies to create virtual vendor master capabilities that go far beyond typical master data management (MDM)-type information that most companies maintain on their suppliers.
Oracle delivers two separate products in the supplier management module area: Supplier Lifecycle Management and Supplier Hub. From a functional perspective, Oracle’s supplier lifecycle management tool provides similar base capabilities to AECsoft, Aravo, Ariba, Emptoris and many others offering supplier management capabilities. Oracle’s solution gives companies the ability to manage supplier registration and continual engagement processes for prospective and current suppliers.
Key to this capability is an automated process and workflow that automatically requests information from suppliers and then routes this information to the correct set of stakeholders for vetting and approval when exceptions occur. Oracle also provides template-style questionnaires, flexible feedback mechanisms and visibility into archived supplier appraisals.
Oracle’s Supplier Hub concept consolidates and maintains complete and accurate supplier master data across a distributed systems environment. Regardless of whether a company is running a consolidated Oracle back-end or a complicated, heterogeneous systems environment based on multiple ERPs, versions and instances, Oracle Supplier Hub can push and pull data in real-time from multiple systems. Supplier Hub can consolidate information from dozens of internal and potentially external source systems (and third-party enrichment data), create master-level supplier classification and mapping relationships, access cross-system information, synchronize and publish data, and apply data stewardship and governance approaches across hierarchies, tasks and overall classification.
Oracle has, however, done a relatively poor job of integrating these functionally strong capabilities into a demonstration environment that spans the onboard-to-source-to-pay lifecycle. Prospective customers should be aware of all integration-related challenges that may arise with other Oracle or third-party products. Moreover, prospective users should consider the other Oracle technology licenses required to run one or both products based on their existing environment and overall supplier management program objectives.
Overall, Oracle software should be in the evaluation.
SAP offers supplier information management capabilities through a separate module created from the original Frictionless product/architecture that is now known as SAP E-Sourcing. SAP’s capabilities in this area include the ability to onboard and enable suppliers for SRM/P2P in a streamlined manner, using forms and workflows to automate as much of the process as possible. The product lets companies manage supplier profiles, classifications, and a range of information types (e.g., insurance certificates, quality certifications, etc.).
SAP Supplier Management also provides a centralized application for supplier monitoring, administration and tracking. The module delivers a limited supplier performance management capability that includes KPI monitoring, tracking and scoring as well.
SAP’s supplier information management product represents an extension of the SAP E-Sourcing product (recently renamed “SAP Sourcing”). For a relatively low additional cost, it delivers a basic approach to supplier information management that may address foundational procurement organizational requirements. Companies using SAP E-Sourcing or other SAP SRM capabilities should consider SAP Supplier Information Management for basic supplier registration and lifecycle management. We give a yellow-light rating to this solution and encourage potential customers to shortlist it alongside best-of-breed vendor capabilities.
For a comprehensive look at this subject, download our Compass Research Paper, An ERP Outlook: Are SAP's and Oracle's Spend Management Capabilities a Fit With Your Own Technology Plans? Part 1.
If you’re interested in learning more about supplier information management solutions in general, download our latest Compass research on the subject.
Jason Busch is Principal Analyst at Spend Matters. His contributions are based on Spend Matters Compass research, which examines a range of procurement and supply-chain technology solutions and trends.