July 11th, 2006
David Bush - Iasta
Maybe SAP took some of that World Cup fever and shocked themselves into action? The quintessential slow moving leviathan announced yesterday that it had acquired Praxis, an on-demand CRM player. I have not been very shy about taking shots at SAP in past due to their massive overhead and inability to deliver in this industry but this time I give them their due with a very shrewd business move.
- SAP is making an effort to integrate best of breed on-demand solutions with traditional applications to deliver a compelling client solution.
- SAP is showing an understanding of the value link between SCM and CRM and is attempting to do something about it by pulling in a quality solution under their product line with over 100 pre-installed clients.
- SAP now has a good counter punch to Oracle-Siebel at a fraction of the overhead and cost of Siebel.
I have to say, I am impressed with the progressive nature of this move, as it is counter to the SAP history of following late. It also affirms the natural migration of the two platforms into one mega-industry. Iasta believes the future of this lies in quality partnerships between companies that can deliver full solution sets across supply chain and customer relationship in a very flexible on-demand model.
However, it can also be argued that this is a defensive measure by SAP to react to acquisitions like Siebel, Retek, and various verticals which coupled with strong competitors like Salesforce has put them into poor position to maintain their strong CRM growth curve.
Either way, SAP just turned up the heat significantly on other CRM vendors to react. Salesforce will not be on the sidelines for long and all the major players are in a very high stakes game of chicken as they try to execute their grand plan for world domination. My Kool-Aid is telling me that Iasta will be perfectly positioned to deliver the best of breed functionality - with the proper alliances - while giants consolidate and add weight.
Entry Filed under: General, Technology, e-Sourcing Marketplace
July 11th, 2006
David Bush - Iasta
I found the recent article by Ramin Tabibzadeh and Len Prokopets entitled The Five Key Elements of World Class Supplier Relationship Management that was recently published in Chief Supply Chain Officer magazine to be top notch as the five key elements echo many of the best practices that we here at Iasta believe in and jive well with our forthcoming whitepaper on Best Practices that will launch our White series on the strategic sourcing cycle, beginning in August.
In it they discuss the many new pain points resulting from strategic sourcing, outsourcing, and low cost country sourcing, including
- increased supplier reliance and corresponding risk exposure,
- ill-defined post-contract supplier management processes,
- suppliers are not held accountable for performance,
- strategic suppliers are often not truly strategic,
- companies are not managing suppliers,
- diminishing sourcing returns,
- employees are often not equipped with the required management skills and knowledge,
- formal supplier development programs are lacking,
- everybody is a vendor manager,
- procurement is not seen as maintaining its fair share of contributions, and
- systems support for end-to-end supplier management is ineffective
and why supplier relationship management needs to be improved to address these issues. That’s why we hear at Iasta are advocating Total Value Management, where risks are balanced with costs, and working on improved decision optimization technology to help you make the right decision, and not just a cost-based decision.
The authors describe five key elements which they indicate will
- maintain negotiated savings while driving incremental savings of up to 5%,
- streamline relationship processes,
- create accountability and incentives for suppliers to deliver value,
- maximize relationship lifetime value and gain competitive advantage, and
- manage supply risks and challenges effectively.
The five key elements they describe are:
- Supplier Stratification
optimize the resource allocation across the supply base
- Supplier Development
drive fundamental improvements in relationships regarding efficiency, quality, and capabilities
- SRM Systems
use systems that manage data, provide standardized tools and templates, and useful, relevant reporting
- Performance Management
use SLAs, performance metrics, and KPIs
- Governance & Organization
define team structures, organizational roles, and responsibilities
In short, sourcing starts with analysis, proceeds to award, and continues through performance monitoring and supplier development. Without appropriate supplier management, negotiated savings can disappear.
Entry Filed under: Functionality, General, Technology, e-Sourcing Marketplace
