Have we funneled out everything in the SRM space, or is there any more oil left in the lamp
……..Looks like we are reaching the saturation level in designing a Supplier relationship management system that can milk the supplier to the extent possible, thats what the enterprise expects the buy side to have on the top of their mind rather than looking at the bigger picture.
It’s a realm for the buy side to have it their way. Let’s listen to a small story.
“Can we really make an SRM solution like Amazon or eBay”, a solution that doesn’t really need to be that complicated, easily configurable, highly intuitive”, is it that difficult for SRM (Supplier Relationship Management) product vendors to vend out mint fresh, rather than following a grandfather approach. They show me a reverse auction powered by the www , so simple and robust, that am speechless. But I have to explain to them what’s more to SRM from the broader perspective…
But the question is
- Why are they comparing?
- Why is the customer still craving for more?
- What are they comparing?
and then the Million dollar question
- What’s more to the story than just auctions and bidding?
To give them the magnitude of an effective SRM solution, we emphasize on the latter being an end to end system that provides them with the Supplier Intelligence through an enterprise-wide, integrated view of a company’s relationships with its suppliers and the commodities or services they provide.
Enabling them collect, analyze and leverage all aspects of their supplier data and purchasing history, giving them that vital insight into their supply base and purchasing history.
Then I go down a level below trying to explain how product vendors have grown beyond standalone ERP solutions and emerged into B2B, trying to get the best out of the internet, its dynamics of enablement, managing relationships electronically and eliminating paper.
The recurring Gartner Quadrant shouts out loud on what’s cooking, where customers should actually be looking, for best of breed bundled over their core applications.
But with the hard hitting IT budget cuts, the Product vendors need to prove to existing and new customers in a Rapid Prototyping mode
Customers have no more patience left, they are confused beyond hope, they are no more flaunted with flashy demo’s or workshops..
…….they are looking for a real solution that can be a mash up of “The real enterprise wide solution in its magnitude with a down to earth ease of use”
It’s for us to wait and watch whether its SaaS, homegrown ERP, or the traditional B2B solution providers that will emerge market leaders in the SRM space. Lets see who wins the rat race and gulps the market share "bottom's up"
Whatever it is, it has to be real!!!!!
- Tridip
Comments
Good to read a customer focused blog. One more important factor to consider is the fact that SRM will be part of a wider enterprise solution of end-to-end transparency - from suppliers to manufacturing to customers.
Posted by: Siva | November 4, 2008 1:02 PM
Nice post Tridip. You have touched a raw nerve with the customers, very aptly, demanding an easy to use SRM solution. Having worked with both, a leading BOB vendor and an equally leading ERP vendor, I do have my preference when it comes to ease of use. But that aside, the twin challenge of adding sophistication under the hood while keeping the affairs (implementation, configuration, usage) simple has certainly kept the vendors on their feet. Borrowing a term from one of Hackett’s papers, “CRM for Procurement” is indeed high on the corporate scoring agenda.
Posted by: Amit | November 5, 2008 6:42 AM
Tridip,
Good observation and I feel that in times to come with growing importance of Mashups, Web 2.0, Cloud Computing and least to say SaaS and SOA and several other such notions and models, enterprises are going to look at more such consumer centric solutions.
Infact recently SAP had launched a competition on "Social Networking for Enterprise Applications", The winner of this contest is going to get $10K USD which might not be a very big sum from SAP's perspective but the focus is evident. The key requirement what SAP was interested in were:
QUOTE
SAP is interested in exploring novel uses of Social Networking capabilities in business applications in ways that benefit SAP’s enterprise customers and their end users. Solvers should discuss the business value of their proposed solutions to SAP’s customers, and explain why end user participation will occur initially and why that participation will be encouraged and sustained over time. Note that security and privacy issues are of major importance in enterprise environments.
Solutions can use Social Networking approaches to solve business problems in domains including but not limited to
a. Inside an enterprise,
b. Between multiple enterprises, or
c. Between an enterprise and external individuals (employees, customers, other enterprises, etc.)
Solvers should show why these business problems are not adequately met by current solutions, and explain how Social Networking capabilities would address them. The value of the solutions for enterprises should also be presented clearly.
UNQUOTE
The above said quotes have been taken off from the Contest Memo. While we have been working/ thinking on demand companies are gradually realizing that in times to come their would be a thin line that would divide a consumer looking for a retail product at e-bay and an enterprise customer looking for a WMS solution at an easily accessible place over the net !!
Posted by: Anubhav Srivastava | November 6, 2008 7:52 PM
Can we really make an SRM solution like Amazon or eBay
Customers are more moving towards the Services rather than products. Why Ebay is more sucessful inspite of 1000 auction software available. It is service based (i.e SAAS) kind of products are hazzle free. Most of SAAS products will fall into an eco system, i.e they get enabled as well as enable other services in their respective domains. They will have minimal setup, no conditions of Hardware or Software pre requistes or minmimal when required as the servers will provide the service. Bigger advantage of SAAS products are lesser service packs (patches). This makes customers fell that all the onus of the product management is with the organization whom they brought it from and they just rent it. This is exactly as renting a house. As a tenant you would rent a house, you would pay for it as long as you get services from the house. But the maitence will still recide with the owners of the house. But if you buy the house, you need to shell out more money, maitain it and wait for some period of time for you investments on the house to fruitify. In case of Softwares as they are not tangible items they cannot be resold, whereas tangible items like house can be resold. (This makes us understand why softwares companies make money).
Posted by: Dheerendra Kulkarni | November 13, 2008 5:28 PM