The Ariba-SAP integration process continues to make strides and briefly took center stage at the Sapphire Now 2014 conference. SAP announced a partnership with the popular online marketplace eBay that will allow SAP users to run their procurement processes through SAP modules and access both the Ariba and eBay networks. And SAP has been making it easier for prospective users to try Ariba, the online purchasing network it acquired in 2012.
The strength of the Ariba-SAP combination, remaining issues of technical integration, and where eBay fits in were topics for this video interview recorded at the conference with Holger Mueller, vice president and principal analyst at Constellation Research.
"[The Ariba-SAP combination] has tremendous potential for SAP and its customers, having really the leading procurement solution," Mueller says. "In procurement economies of scale matter tremendously. Ariba has the biggest purchasing community out there, so you get the best prices for certain supplies."
Mueller says he doesn't think SAP did a good job of pitching the Ariba buy at last year's Sapphire Now. "I'm very happy to see [SAP CEO Bill] McDermott giving customers 30 days' free supplier ramp-up. But 30 days are not enough. We recommend customers to negotiate more than 30 days given that they have a foot in the door."
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"It makes sense to have one vendor integrate all your processes, including your procurement, if you're an SAP shop," Mueller says.
The analyst called the new eBay partnership "a very good move" that allows SAP to offer Ariba for high-end procurement and eBay for smaller specialty items, as the keynote demo showed. The result, he says, will be "one place where you do all your purchasing out of SAP."
SAP still has work to do, however. "How is it all going to migrate and move together," Mueller asks. "A big challenge for SAP is they don't have a great integration platform like some of their competitors have."
In the video, Mueller also gives advice on the Ariba-SAP choice for companies that already have procurement software.