Posted by Duncan Jones on May 27, 2010
In addition to my software pricing and licensing research, I also study use of technology to improve procure-to-pay (P2P) processes; so, I'm always interested in customer presentations at software company events, in case I can spot some new best practices or interesting trends. This week I’m at Ariba LIVE in Orlando, but last week I was at SAPPHIRE NOW in Frankfurt, where I attended a presentation by a project manager from a large German car manufacturer talking about his rollout of SAP’s SRM product. Given that it wasn’t in his first language, the presentation was very good, and quite humbling to an anglophone, even a relatively multi-lingual one. (I can say “two beers, please” in eight other languages, but wouldn’t dream of presenting in any of them).
However, the overall case study was disappointing. I won't name the company, but I’ll just say that the SRM implementation didn’t look to me like as good a “leap forward through technology” as I expect to see in a showcase presentation. In particular, I was disappointed to see that this company is:
- Transacting with suppliers only via a self-service portal. This is a common flaw in SRM implementations. Manual entry and download tasks create additional cost for suppliers. Surely, in this decade, large companies should use supplier networks to send orders and receive catalogues and invoices directly to/from their supplier’s systems.
- Letting business units keep sub-optimal processes. One of the keys to getting eProcurement adoption is to ensure that the requisition-to-order process is quick. Ideally the purchase order (PO) should be in the supplier’s system on the same day, or at worst the day after, otherwise people will get fed up waiting for their stuff and will revert to ordering by phone. This company had customized approval workflows to suit each business unit’s legacy process, rather than persuading them to accept a best practice company standard. One division had even demanded, and been given, ten separate approvals before SRM could issue a PO!
It is dangerous to extrapolate from one case study, and maybe this one isn’t representative, but what is worrying is that this was the one that SAP picked, out of all the companies that have bought SRM, to support its claim that "best run businesses run SAP." I speak with hundreds of companies each year, and I haven’t noticed this correlation. Indeed, SAP is so ubiquitous that it may be equally true, statistically, to say “the worst run businesses run SAP.” I know from my research for the next eProcurement Forrester Wave™ evaluation that SAP has significantly improved SRM over the last year or so and it’s the right choice for some organisations; but I’ve also found that many companies buy their incumbent ERP’s add-ons for bad reasons, without proper consideration of best-of-breed (BoB) alternatives.
I’d argue that best run businesses don’t place too much weight on brand and customer logos – they do a proper evaluation and pick the product that is the best fit for their specific situation (which may or may not be SAP). They also choose implementation partners that will act as agents of change, delivering rapid, wide adoption using best practices and push back when the client asks them to configure the system to support sub-optimal legacy practices. These are the case studies that I want to see.