SRM is one of the most mis-understood areas of SAP. Could it be that people get confused because SRM sounds like a mixture of SAP and CRM?
SRM actually sits at the other end of the SAP business suite and stands for Supplier Relationship Management. It is SAP's e-procurement and e-sourcing product.
Product background
The first SAP e-procurement tool, BBP v1.0 was launched in 1999 and offered limited functionality to start with. 2002 saw the launch of the first version of SAP SRM, which was significant because it provided the company with much deeper product functionality. Prior to this, SAP Markets' capabilities were limited to e-procurement and exchange technologies. Today mySAP SRM is a comprehensive sourcing and procurement tool that runs on the SAP NetWeaver platform, and is designed to be used across all industries.
The procurement element of SRM is called EBP (Enterprise Buyer Professional) and over the past four years it has become a good and stable e-procurement tool. It is much loved by both users and managers a like. End users because it is intuitive and easy to use. Senior management because its implementation can be straightforward and it can provide immediate and visible benefits to the purchasing community on a reasonable budget.
Over the last few years, and with the e-procurement aspect of the product being more mature, SAP has been focusing their efforts onto improving the sourcing side of SRM. Although there is still much to be done to compete with other e-auction offers and bidding engines such as Ariba or Emptoris, SRM in its currently available version, 5.0 already offers a few interesting functionality. Version 6.0 will be soon available in 2007/2008 and promises to be going further in that direction.
Core SRM functionality
SRM core functionality covers three scenarios:
The future
Since 2005, SAP has been putting significant effort into taking SRM up to the same level of functionality as its competitors.
The current version 5.0 of mySAP SRM still leaves SAP's SRM offer behind its best-of-breed e-sourcing competitors such as Emptoris or Ariba, but the announcement of version 6.0, due in Q4 2007, creates hope for an improvement in the future, although we understand that this new version is much more complex to implement than previous ones as a result of technology changes.
Key features lacking from SRM are especially in the areas of the user interface, optimisation, analytics and reporting.
SAP recently acquired Frictionless Commerce, a major supplier of SRM. Frictionless SRM software enables large and midsize enterprises to effectively perform spend analysis, supplier profiling and performance management, sourcing and contract management. The challenge is now to integrate Frictionless capability into core SRM components, so to provide customers with integrated "one-stop shopping" for all their procurement application needs.
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