Even though I am a SAP employee, I have recently started to feel a bit uneasy about SAPs moves on the procurement side. After a number of discussions with some colleagues and also representatives of Mill Products & Mining Companies, my picture of this is much clearer than before. And I just wanted to share my thoughts on this.

Mill Products & Mining Companies are part of a huge network – they are having a number of suppliers & partners – and there are customers. And within this network, the Mill Products & Mining company is trying to get the best suppliers and partners to help serve the customers in the best way.
It is becoming more and more critical how to better collaborate within this value chain to deliver a better service.

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So what is SAP doing to help a Mill Products Company to work better in this network? A number of things are currently on SAPs offering.

On the customer side, apart from the on premise offering for customer relationship management, SAP has added cloud solutions like hybris to the picture. This should improve the channels to the customers, it should improve the service capabilities and also the collaboration with customers.

Within the company, SAP has invested heavily in making the product offering better, lets just mention a few things like HANA and also Fiori. So it should help the employees of a Mill Products Company to work better with the ERP tools.

And now – what about the buying side of this network? Is SAP a little crazy, or why are they making one acquisition after the other in this area? Is it really necessary to have soooo many solutions on the buying side? SAP has a huge portfolio in this area – traditional SRM self-service procurement for MRO type of material, Ariba as the cloud solution for this topic, Fieldglass has been added to this, and now the plan to acquire Concur…

When you talk to the IT team in a Mill Products & Mining Company, they will probably say that this is bit too much for such a simple topic like procurement.

However when I talked to the procurement team, I have heard a different opinion. What the procurement folks are telling me is the following:
– Modern procurement is very much organized towards spend category
– Different spend categories require different processes (while Supplier Risk Management is highly important in direct material, it is not crucial in travel and expense category)
– It is different partners and suppliers in different spend categories – and the partner/supplier is usually a specialist in this spend category also for other buying organizations
– There is different communities in different spend categories

So the way you buy a commodity is different from the way you buy a computer or you buy a travel. The way you pay for a computer is different from the way you pay a house. This really convinced me, that the processes are different and the user experience is different – and it is required to reflect those differences in software.

After all those discussions, I am feeling much better about the approach to offer a variety of procurement solutions – for a variety of procurement categories!

I’d love to hear from you – what are you experiences with different procurement categories? Did you have some funny experiences like being asked by the software to settle your bill of new car cash?

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