ERP Versus Best-Of-Breed — Emptoris' SAP-Shop Customers Give Their View

My tireless research of sourcing and vendor management technologies has brought me to Barcelona, for Emptoris’ EMEA customer conference. I’d like to assure my colleagues in Boston, still cold and still "0 and . . .",  that I’m not writing this while sitting in the sunshine at an open air café, sipping a cold cervesa and watching the lightly clad señoritas walk by. I’d like to assure them that, but I can’t, because this is exactly what I am doing. Hopefully you’ll also be able to experience Barcelona if you attend our IT Forum here in June: http://www.forrester.com/events/eventdetail/0,9179,2510,00.html

I saw some very good presentations by customers about their implementations of Emptoris’ sourcing site. As a fearless analyst, I asked the question about the elephant that, while not actually in the room here in Barcelona, is certainly present in the customers' IT environment, namely SAP. All the speakers were procurement professionals in supposedly SAP-shops, so why had they chosen Emptoris over SAP’s sourcing and CLM products?

The consistent answer was that, while their IT colleagues did indeed pressure them to go for SAP, they decided that the benefit to them of Emptoris’ superior functionality outweighed the benefits to IT of OEM integration and technology standardization. Indeed, Emptoris has further reduced those IT benefits by signing a deal with the Business Objects team to use their product as the embedded reporting tool within Emptoris’ solution, so SAP can no longer use BO as a differentiator. No doubt I’ll hear a different story at the SAP Insider event in Paris next week, at which I’m speaking (if I don’t get burnt as a heretic beforehand). Hopefully there will be SAP eSourcing customers there with equally successful projects, matching the Emptoris customers’ adoption and savings. And hopefully the Red Sox will have won a game by then.

Clients ask me frequently about the age-old ERP versus best-of-breed debate. “What about integration?” they ask. “Integration, schmintegration” is my reply. Linking 20 different ERP instances with a single sourcing suite is a data harmonization problem, not a technical one. OEM integration may help a bit, but insufficient to offset any (alleged) functional deficiencies in the OEM’s other products. AngloAmerican presented a great example at the Emptoris event, describing how they used SAP MDM and PI technology to link Emptoris CLM and Spend Analysis with multiple ERP back-end instances.

Don’t misunderstand me — I don’t disparage SAP. Its ePurchasing product management team continues to develop its portfolio wisely, and my early sight of the next release of its sourcing suite, Wave 8, suggests that it may well challenge for the Leader sector when I refresh the eSourcing Forrester Wave™ later this year. My point is that eProcurement professionals should pick SAP’s ePurchasing tools if and only if they prefer them to the competition, not because their IT counterparts tell them to do so. Functionality, usability, innovation, implementation, and support services are all more important criteria than integration, and technology standardization is even less important for hosted applications.

Bottom Line: Procurement executives should use objective functional criteria to pick ePurchasing solutions, giving appropriate but marginal weighting to factors such as integration that favor the incumbent ERP vendor.

What are your views? Am I undervaluing technology standardization? Or is best-of-breed over-rated?