SAP spend management product in disarray

Summary:Spend management expert and fellow Irregular Jason Busch has the skinny but it seems SAP is planning to can SRM 6.0 for those customers not already in the release 6.

Spend management expert and fellow Irregular Jason Busch has the skinny but it seems SAP is planning to can SRM 6.0 for those customers not already in the release 6.0 ramp program. SRM 6.0 is also known as SRM 2007. This is a disaster for SAP and opens a 12 to 18 month selling window for competitors like Ariba and Oracle:

The botched release has the potential to have disastrous effects on the SAP procurement pipeline because SRM 6.0 was to address many of the weaknesses of 5.0 which included a kludgy UI, a challenging interface that made it hard to search and find POs, a cumbersome process to define filters, and workflow which forced users to go through multiple clicks to launch actions (I once heard it referred to as the "anti"-one-click-Amazon).

The SAP spin machine swung into action. Again, according to Jason, John Zepecki, SVP and GM, SRM, SAP Labs wrote to customers saying:

"After reviewing all potential options we have decided the best path forward is for the SRM 2007 release to only be shipped to customers that have already been identified as part of our 2007 SRM Ramp-Up program. We are therefore advising all customers to start any new projects on the proven SRM 2005 release and then to upgrade to a future version of SRM."

The precise reasons for this action are unclear but there must be something seriously wrong with SRM 6.0 for SAP to announce a withdrawal from general availability of what is a major revenue driver. Jason speculates the product has been over engineered and is proving way too difficult for customers to implement. However, this leaves open the question whether the next release, SRM 7.0, now slated for general availability in 2009 will be any better. In conversation with Jason, he said:

Right now if there's a buying decision to make and it's a heads up between SAP and Oracle, Oracle gets the check, no question.

Existing customers on SRM 6.0 (SRM 2007) are not being left entirely in the lurch but new customers are being asked to consider a previous release with upgrade to SRM 7.0 when it comes available. Spend management is a hot topic for companies looking to find savings in their procurement activities but as with all software buying decisions, customers will not take un-necessary risks.

Topics: Enterprise Software, SAP

About

Dennis Howlett has been providing comment and analysis on enterprise software since 1991 in a variety of European trade and professional journals including CFO Magazine, The Economist and Information Week. Today, apart from being a full time blogger on innovation for professional services organisations, he is a founding member of Enterpri... Full Bio

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