Overwhelmed about the different Procurement Solutions on SAP Platform? This simplified guide might help.
Businesses today are seeking higher profits from bottom line cost savings by leveraging sourcing and procurement functions. Forward looking companies are viewing procurement operations as profit centers. They are making procurement a more strategic partner in the organization by strengthening supplier relationships. SAP provides multiple procurement solutions such as Ariba, Supplier Relationship Management and SAP Sourcing. How does one select the one that best fits the specific organization needs? he decision for selecting an appropriate procurement solution for a customer does not depend on just the functionality offered by each solution but also on various other factors as listed below –
- Implementation Cost /time-frame
- Support/maintenance involved
- In-house knowledge base
- Scalability
- Security
- Industry
- On-Premise/On Cloud
- Evaluate existing customization
Listed below are some of the differences between each of the procurement solutions –
PROS AND CONS ANALYSIS WITHIN EACH SOLUTION
[Note: Rated on a scale of 1 – 5. With 1 = Lowest and 5 –Highest]
SAP SRM has the ability to seamlessly integrate with ECC, there is no restriction on the level of customization that one can do in SRM and Sourcing as oppose to Ariba. Also, PPS (procurement for Public Sector) which caters to public sector is a strong feature within SRM, which is missing in Ariba and Sourcing. On the other hand, Spot buy is feature which automates the tactical sourcing process within Ariba and is given full stars for its fast ROI.
IN CONCLUSION
The key differentiation is that SAP SRM is an on premise solution that can integrate well with other SAP products such as MDM (for Catalogs), ECC (for follow on documents), and HCM (for the Org. Structure). On the other hand, SAP Ariba is an On-demand solution that has an excellent Supplier Network base. It is continuously expanding along with Spot Buys which usually includes one time/emergency buys which cannot be fulfilled by incumbent suppliers.
The answer to the right solution is not always straightforward and requires deeper analysis into the nature of the organization and the specific business scenarios it is involved in.
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