ERP software market leader SAP is aiming to bring CRM-like functionality to the supply chain sector with its latest supplier relationship management (SRM) product. At the same time, the once strictly proprietary company is proving its ability to offer tools that work across multiple architectures.
The Walldorf, Germany-based software maker has built its mySAP SRM offering on its recently unveiled mySAP architecture. Created by its SAP Markets subsidiary, mySAP SRM is the firm's first journey into the world of cross-vendor architectures.
"That's one of the beauties of this particular release," said Faheem Ahmed, senior manager of SAP Global Solution Marketing. "MySAP SRM works with any back-end system whether it's ours, Oracle's, PeopleSoft's or J.D. Edwards'."
This concept would seem revolutionary based on SAP's historical preference to keep customers under its own proprietary umbrella. Analysts agree that the release marks a turning point in the firm's overall strategy.
"It's something they've been working on," said Karen Peterson, an analyst with Stamford, Conn.-based research firm Gartner. "SAP is moving away from being closed as an architecture. They're developing much more openness in terms of working with other content providers. They've recognized that they have to do this to be competitive with these kind of products."
Keeping tabs on all suppliers
With the software the company is attempting to streamline its supply chain suite by combining both technology and business applications to help companies better manage all their suppliers. The emphasis has been put on helping customers stay abreast of all their supplier relationships, regardless of size or importance.
"The focus traditionally has been on getting close to top suppliers, but smaller guys were slipping through the cracks," said SAP's Ahmed. "There's a big amount of spending in the middle and that's where the inefficiency lies. Customers tell us they need to understand smaller companies that supply critical products but that don't make up a lot of their spending. This is where technology had failed in the past."
Ahmed believes that the use of the mySAP Technology architecture will ultimately drive upgrades of mySAP E-Procurement, which already has some 1,200 installations, as well as new sales of the new SRM suite.
The technological aspects of the software mirror those trumpeted throughout the mySAP suite. These include a new portal infrastructure, an improved Web applications server and the exchange infrastructure that allows for the use of different vendor architectures.
According to SAP, the companies driving demand for this kind of product include those increasing their level of outsourcing, as well as manufacturing companies from the telecommunications industry to the consumer products sector.
"It's significant to the overall SRM space that SAP is taking a stance in the market," said Tim Minahan, an analyst for Boston-based research firm Aberdeen Group. "We're seeing sort of a new and improved SAP here. The collaborative elements of the product allow new connections to resellers in the channel and products still in the engineering stage. And it's a big statement for them to move away from the proprietary stance and work with things like Java."
But while both analysts agree that the product is valuable to SAP, Gartner's Peterson believes the company still has some work to do.
"Because SAP is the largest ERP vendor it validates the concept of SRM, especially SRM within the ERP solution stack," she said. "But they still have some product maturity issues to tackle before they've got an entire suite. They're analytics are pretty immature."
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