SAP Markets' new mySAP Supplier Relationship Management product builds on the previous e-procurement solution, adding extra punch in the form of increased functionality.
MySAP SRM automates and streamlines many, if not most, aspects of the procurement process. The result should be enhanced efficiency and better communication in dealing with your suppliers, which should benefit everyone.
New technology is cool, but do you really need it? What you can expect from mySAP SRM and is it worth the time and money? Who should upgrade? And if you decide to go for it, what steps should you take to ensure a successful implementation? Several analysts answered those questions. They said while the product appears to offer some real help to businesses beleaguered by supplier management issues, it is still new and relatively untested.
MySAP SRM is in line with SAP's commitment to openness, making this release another step away from their previous proprietary stance. Among other things, mySAP SRM works with all back-end systems, not just those running SAP.
"SAP tends to be agnostic to which hardware you use, and with SRM we can afford to be agnostic to the back-end systems as well," said Faheem Ahmed, senior manager of Global Solutions Marketing at SAP.
When SAP released its CRM 3.0 solution last year, it too ran on different platforms. However, some experts complained, you had to run it on a SAP system to reap the full benefits of the product. In the case of mySAP SRM, Ahmed said, there should be no change in functionality for non-SAP users.
He said mySAP SRM solution is designed to leave nothing to chance when it comes to your suppliers. In the past, you had to focus on the most vital suppliers and leave a good percentage of the small fry unattended. This product lets you not only keep all suppliers on your radar screen at all times, it also allows you to get a better big-picture view to help you spot trends and plan ahead better, he said.
In addition, process automation was typically only for the top suppliers, leaving the smaller ones to less effective and inconsistent methods to do business. MySAP SRM streamlines the processes across the board and does away with lengthy approval processes and manual retyping.
"By using exchange and portal based technology, you can connect all these suppliers very efficiently and quickly," Ahmed said. "By doing this, mySAP SRM can reduce your cost, probably between 5% to 10% of total spending."
He said the real benefit happens when you can connect all your suppliers and channel all your spending through this system. It is by taking on a holistic approach that you increase compliance, ensure control, and compress cycle time.
Strengths and weaknesses
Albert Pang, e-commerce software research manager at IDC, said he is impressed with the integration angle. He said the product fits into his view of what unified commerce is supposed to do for a business, allowing the use of the Web to unify multiple systems in order to conduct better commercial transactions.
"SAP is onto something that a lot of companies are trying to accomplish and they have a good shot at delivering real value to these customers," he said.A Gartner analyst raised concerns that the product is still new and untried.
John Moore, vice president and general manager at ARC Advisory Group, said anything that is new has maturity issues but he is not too concerned.
"SAP is trying to bite off a lot, so there can certainly be bits and pieces that have maturity issues," he said. But, he said, SAP has a good track record in resolving glitches in new products.
Ahmed said most analysts were impressed with what SAP presented last year and the new offering simply added three times as much functionality, based on what customers were asking for.
Who needs mySAP SRM?
If you lack a current e-procurement solution and your supply chain is a mess with severe inefficiencies, mySAP SRM is a good bet today, Moore said. It is a good product with many powerful features. But if you already have SAP's previous e-procurement solution, you might want to take it in bits and pieces, he said.
Before making a decision, potential customers should establish the return on investment. Moore suggested starting with base metrics and mapping that to what you are trying to accomplish.
"Don't buy it for technology's sake; business drives the decision, you're here to make money," said Moore.
Moore suggested potential customers ask SAP to demonstrate the added value of the different features as they relate to their businesses before making a decision. Ultimately, the decision will boil down to your own urgency and your faith in SAP's ability to handle any potential maturity issues, he said.
The roll out schedule
Your rollout schedule depends on the depth of integration and how many divisions and suppliers you want to connect. Ahmed said it should take a few weeks to install the software and another few weeks to get everything configured -- or about four to six weeks.
Moore said that sounds slightly optimistic, especially since no one has implemented the whole product yet.
"Including training, I would put it at seven to 10 weeks, at least. In an ideal situation, four to six weeks might work, but I'm a little cautious," he said.
Connecting the suppliers is relatively painless, Ahmed said. If you create a portal using SAP Portal technology, all you have to do is set up the same portal with a different user menu. It's just a Web site, so as soon as you have your suppliers up to speed on how to use it, you're set. It's quick, easy, and requires no investment on the part of your suppliers.
For the more in-depth relationships, you can invite the suppliers to integrate their processes with yours through an exchange. This costs money and is only suitable for long-term relationships with key suppliers but can result in a better overview and ability to forecast properly.
This boosts the value of the product dramatically in the long run. MySAP SRM uses EDI mapping for each flat file and supports all XML standards.
Things to keep in mind
Planning head is crucial to ensuring a smooth implementation, Moore said. Since this product has many touch points within a business, it is vital that everyone is playing ball, he said. Executive support is a key part to achieve this, so that there is no bickering on the middle-levels, he said.
Suppliers also need to be part of the process, he said. At least the top 10 to 20 suppliers should know what you're up to, so that they can begin preparing on their end and let you know if they have any preferences.
Pang advocates caution by rolling the software out in a series of pilots and small implementations to make sure everything works at the department level first. Then, when you can see that everything works as it should, you can blow it out on a larger scale.
Refrian from customizing
A common mistake among SAP users, almost regardless of product, is to over-customize, Moore said.Customizing a lot might seem like a good idea now, but that can lead to administrative headaches later on. By keeping things as out-of-the-box as possible, future support issues can be reduced drastically, he said.