SAP'S strategy for supplying its users with electronic
procurement capabilities is under fire from analysts as too
proprietary.
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SAP is banking on organisations turning their enterprise
resource planning (ERP) systems into internet-enabled
mechanisms for buying and selling between themselves,
creating so-called trading hubs.
To enable this, SAP has invested heavily in its mySAP.com
Marketplace trading hub product and Workplace enterprise
portal product.
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SAP has also developed e-procurement software called the
business-to-business procurement (BBP) framework.
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But manufacturing consultancy AMR Research last week
warned that SAP's customers are being pressurised to
upgrade to R/3 version 4 to take full advantage of the
features in Marketplace, and that BBP lacks the functionality
of competitive offerings.
Most ERP software, such as R/3 versions 3 and below, are
built to the client/server model, making it difficult to
integrate with net appliances. However, these integration
problems don't necessarily justify an upgrade to version 4,
said AMR vice president, Bruce Richardson.
"SAP is afraid that its large customers are buying
eprocurement software from Commerce One, Ariba and i2,"
added Richardson. "It is pushing very hard with advanced
selling to stop customers from walking away."
GartnerGroup research director Andy Kyte added that
"generic eprocurement systems proposed by the ERP vendors
are unlikely to offer buyers the same sophisticated contacts
and content as the vertical market sites."
"If users ignore these systems by becoming locked into a
single trading site, they will be ignoring potential markets," he
said.
Companies will use numerous sites to buy and sell goods in
the future, so tight integration between back-end systems
and trading hubs will be impractical, he added. Users may be
better off considering a wider variety of trading hub
architectures.
Gareth Williams, procurement manager at National Power,
said he will look at expanding its eprocurement system to buy
production goods within two years. However, "an issue with
[multiple trading sites] will be ease of use and how familiar
users will be with several different systems," he warned.
When Hasso Plattner, co-chairman of SAP, announced
mySAP.com at its Sapphire user conference in Nice last year,
he claimed that it would lead to "a new level of integration
across enterprises - one-step business."
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