Anybody who has lived in India, especially North India, would be familiar with the term ‘Garam Masala’. It refers to a blend of ground spices which add flavor and taste to the recipes. The composition of Garam Masala differs according to regional and personal taste and none of the composition is considered more authentic than others. A typical version of Garam Masala contains black & white pepper, cloves, cinnamon, bay leaves and chilies among other lesser known spices. Traditionally, most of the recipes contained Garam Masala and it was a common assumption that once you put it in any recipe, you would hardly need to add any other spice and the taste would be awesome! With the fast-paced lives of the metros coupled with families becoming more and more nuclear and burdened with economic pressures, people nowadays are on the look-out for much easier ways of access and consumption. So rather than procuring all the ingredients of Garam Masala as per the specified proportions, grinding & then toasting the mixture, people prefer to buy the individual spices and then use those as per the demands of the recipe.
Something similar is happening in the IT industry too at the moment. Gone are the days when the enterprises created or bought ‘boxed’ solutions from IT vendors, hired large consulting teams to configure those solutions and spent even a larger chunk of money to customize and maintain those solutions. These days all the enterprises are expecting ease of access & faster time to value from their IT solutions. This has also led to a shift in strategy of large enterprise software providers like SAP, Oracle etc. A case in point is the procurement domain. Earlier, to address the procurement requirements, the IT providers used to position ERP (Enterprise Resource Planning) and/or SRM (Supplier Relationship Management) as their go-to-market portfolio offerings which contained a mix of various procurement scenarios. Even their implementations used to be focused on scenarios like ‘Self-service procurement’, ‘Strategic Sourcing’, ‘Supplier collaboration’ etc. However, now the whole focus has shifted to address various categories of spend by deploying a seamless integration of best-of-the-breed offerings (either acquired or evolved by their R&D teams). To top it all, most of these are cloud offerings which provide instant value and access to greater innovations.
In the past few years, SAP invested a lot of money to acquire IT leaders who offer best of the breed offerings in various spend categories like Ariba (for indirect spend), Fieldglass (for contingent workforce or contract workers) and Concur (for travel & expense). This coupled with SAP’s in-house products like ERP & SRM, offer customers a wide variety of choice to address their specific spend categories. This also addresses and appeals to the top priorities of a CPO (Chief Procurement Officer). For example, if a CPO is concerned about a lot of spend happening in the travel & expense domain, SAP can position a combination of various Concur and ERP scenarios which help to address just that. Similarly, to address the concerns/issues related to workforce management SAP has distinct use cases with a combination of Fieldglass and ERP (for external workforce) and Success Factors and ERP (for internal workforce). Various solutions in Ariba coupled with ERP offer distinct competitive advantage for handling indirect spend. For managing direct spend as well ERP coupled with SRM/Ariba offer numerous use cases. Add to this the power of business networks on cloud. The advantages of deploying a combination of these solutions get multiplied when they are used to connect to a network of suppliers, service providers, airlines, hotel chains and numerous authorized taxi operators.
From a cost standpoint as well, as most of these integrated scenarios are purely based on cloud or operate in a hybrid model, the capex vs. opex equation comes into the picture and hence these become a very lucrative option for the enterprises. World is changing for the better and with each passing day newer innovations/use-cases are becoming evident in this model. It is just like procuring ready-made individual and pre-packaged spices from the market, adding those to our recipes which are designed for different occasions. It is a no-brainer that you require a different spice-mix for preparing breakfast, a different one for lunch, dinner etc. and a totally different one for preparing your favorite cuisines for special occasions. Isn’t this IT transformation (boxed vis-à-vis category based) similar to a paradigm shift in the mindset from preparing only those (and being limited to) cuisines/recipes which are governed by Garam Masala and marching towards occasion based cooking, leveraging the readily available cost-effective prepackaged/integrated spices provided by trusted brands in the market! Does it mean that Garam Masala is now a thing of the past? Definitely not. In all these scenarios, the enterprises still have an option of adding that little tinge of their own Garam Masala to spice up the offerings and provide them with a flavor of their competitive advantage. However, the enterprises need to be cautious of adding Garam Masala only to the extent that they can digest!
Disclaimer: The thoughts, ideas and analogies represented in this blog are limited to the manifestations of the writer and do not represent the official go-to-market strategy of any software provider.