SAP AG markets on Wednesday officially announced its new SRM (supplier relationship management) product, designed to manage supplier interactions to boost enterprise competitiveness and profitability.
The new SRM product will focus on streamlining the entire enterprise sourcing process, from evaluating suppliers through monitoring compliance to negotiated contracts. The new product, which builds on the mySAP E-Procurement offering developed with marketing partner Commerce One, will now make SAP a direct competitor of Commerce One Inc. Commerce One rolled out its own strategic sourcing product last month.
The announcement marks a crucial time in the partnership between SAP and Commerce One. Commerce One, which has posted steep losses in the past two quarters, receives as much as 50 percent of its revenue from joint sales with SAP. SAP officials have said that Commerce One will continue to be a key partner in the integration space, but analysts have said that deals that feature the two approaching customers jointly for procurement and marketplace deals will decrease following this announcement.
The new mySAP SRM features include supply strategy development, supplier qualification and selection, contract negotiation and management, supplier self-service, content management, operational sourcing, self-service procurement, plan-driven procurement, and relationship monitoring. Relationship monitoring is integrated with supply strategy development, resulting in a full-cycle supplier management solution designed to manage supply relationships continually rather than as a one-time event, according to company officials.
With this announcement SAP becomes the latest ERP company to enter the sourcing fray. Competitors PeopleSoft Inc. and Oracle Corp. both rolled out sourcing applications last year. They are all competing directly with business-to-business companies such as Ariba Inc. and Commerce One that have also recently added sourcing solutions to their product portfolios.
SRM applications must be designed to openly integrate with any back-end CRM, supply-chain management, or ERP system, said Karen Peterson, an analyst at Gartner Inc. The most successful SRM solutions will use exchange technology to enable businesses to integrate with their entire supply base, she added.
SAP has coupled its proven track record in mission-critical business processes with its expertise in public and private exchanges and e-procurement to deliver a solution that enables companies to transform unmanaged, ad-hoc supplier activities into collaborative, value-driving relationships, said Mayur Shah, president of SAP Markets.