SAP SRM becomes strategic with spend analytics: Procurement and sourcing professionals know that obtaining sustainable value requires a set strategy. The SAP SRM application has struggled for years because the analytics functionality that procurement organizations need in their strategy setting has not been complete, requiring customers to use third-party services for spend data classification and enrichment.

No longer. SAP announced this month the acquisition of Analytics, Inc. The acquisition brings spend data classification, data enrichment, and supplier normalization to the SAP Spend Analytics piece of SAP SRM. This much-needed boost will definitely give best-of-breed vendors Zycus, Emptoris, and Endeca competition.

The product, when coupled with SAP E-Sourcing, finally brings strategic sourcing to SAP. Companies such as Callaway Golf and Johnson & Johnson, both Analytics, Inc. and SAP customers prior to the acquisition, are seeing the benefits during their three-to-six month go-live projects and in the consolidation of spend. The benefits to date are aggregated spend and an opportunity for identification. SAP also provides this functionality in its enterprise performance management (EPM) for procurement product.

BMO enhances Spend Solutions suite with Ariba functionality: BMO Financial Group has joined its Spend Solutions suite with Ariba's On-Demand products to deliver a fully integrated source-to-settle process. Spend Solutions now couples the Ariba sourcing, invoice and payment, and supplier network with BMO's corporate payment and financial services.

The product provides visibility to several functions across a company: trade finance, cash management, and procurement. It will allow companies to manage all types of spend, as well as their spend and payment strategies, through one provider. BMO is currently building the product for an internal pilot. We expect it to exploit its banking industry experience in its efforts to expand into supply chain financing applications.

First nationwide banking RFP finds success with CombineNet: Using the CombineNet sourcing application, the United States Postal Service (USPS) held the first automated RFP process for nationwide banking services during the past year. The RFP included 23 banks across the United States over the course of a year, which concluded with awards in July 2008. According to participating banks, the electronic RFP was the first ever for banks. The electronic RFP focused on the process and accessibility of money deposits, including electronic processing, check imaging, and currency and coin orders for the 37,000 USPS retail stores.

The USPS and U.S. banks learned how to use CombineNet's electronic sourcing functions, including complex bidding, analysis, and award. The RFP contained 10 line items for each of the USPS 81 districts. The combination of responses from each bank based on the different districts and retail stores served was too cumbersome for a manual process. So the USPS turned to CombineNet for assistance with the complex RFQ, analysis, and award process.

CombineNet's sourcing and optimization solutions improved the USPS analysis time by two to three months. Because of the reduction in time and the ability of the application to run more analytics, the USPS was able to have a second RFQ event that provided even more value.

The USPS summed it up this way: "CombineNet balanced the power of our negotiation. It allowed us to simulate different scenarios, and, based on the cost/benefit analysis, we could decide what features we really needed. Without their e-sourcing application, we normally would put our analysts on a half-day project to calculate the various scenarios. Instead, CombineNet's sourcing and optimization solutions saved us valuable time and resources."

Ketera takes a lesson from the wireless carriers: Ketera, taking a lesson from the wireless carriers, announced an affordable web-based sourcing product. The sourcing product allows users to list any product or service, invite suppliers to bid, create a reverse auction or RFX, evaluate the bids online, and make the award. Ketera also provides wizards and templates for user process efficiency. The product has a 30-day free trial and is priced similar to a wireless carrier pricing plan, with three options:

1. Basic:--6 reverse auction events per year and unlimited RFX for $39.99/month
2. Advanced Plan:--12 reverse auction events per year and unlimited RFX for $59.99/month
3. Professional Plan:--24 reverse auction events per year and unlimited RFX for $99.99/month

This is a great tool for those that want to try RFX and auction functionality without major investment into a sourcing suite. The product also ties into the Ketera supplier network, reducing supplier search. However, buyer beware: complex auctions and bidding may not be part of the program. Be sure to e-mail us if you use the product as we want to hear your opinion: mnorthrizza@amrresearch.com
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