Today, the strategic significance of procurement has shifted as small to midsized companies recognize that suppliers are crucial for achieving business objectives. And with procurement playing a key role in developing a collaborative and effective supplier relationship, it has become a valuable contributor for businesses.
However, with increasing importance comes new challenges. Companies also need to be concerned about risks that can result from not knowing enough about their supply chains. To avoid this, companies need to make their supply chain more resilient, requiring more visibility and transparency. This includes sharing information up and down the supply chain with partners about such things as supply and demand fluctuations, capacity constraints, and sustainability data around emissions, waste, and the health and safety of employees.
Let’s take sustainability, for example. In the past, the supplier selection and sourcing criteria for indirect and direct materials were more focused on price, quality, and delivery accuracy. Now, as more sustainability regulations emerge, the procurement function has turned into a strategic operation that is responsible for monitoring carbon emissions, waste, and other important sustainability factors.
We see a trend where CPOs and CFOs model sustainability costs into their systems and supply chains, which can lead to a renewed sourcing process where established suppliers might be replaced with ones that can fulfill new sustainability criteria and requirements. As such, midmarket companies operate with constrained resources and a more localized approach than their multinational competitors, so they often depend on partners to manage relationships with customers.
How SAP’s Partner Ecosystem Can Help
Generally, supply chains are often global, while suppliers and buyers are more localized. Given this, they require further assistance and understanding of a global supply chain. The SAP partner ecosystem provides a unique combination of global partners that can manage global rollouts and business services for their clients while also providing local champions that understand local conditions best. Even if clients are local and need to provide global services, SAP’s partner-to-partner framework can provide global or regional coverage for local clients that require rollouts in multiple countries.
For instance, the ecosystem offers a crucial link to local customers, working as an extension of companies to help them find the right solution for their needs and offering a blend of expertise, such as overcoming potential language barriers or navigating local regulations.
At SAP, we’ve put an increased emphasis on serving midmarket companies with partner-driven solutions. With programs like Boost Your Core and Spend Management for Midmarket Companies, the midmarket has become our fastest growth area in the whole of intelligent spend and business network, growing more than 50% quarter-over-quarter.
But more importantly, the partner ecosystem for midmarket is growing even faster at over 70%, underlining the importance of partners for midmarket operations.
SAP offers powerful software and tools for businesses, but a strong partner ecosystem is crucial for tailoring those tools to the unique needs of each company. Partners can build customized solutions on top of the tools we provide, creating niche opportunities and use cases that can attract customers, which is especially helpful in a localized environment.
The SAP PartnerEdge program offers businesses four specific models: build, sell, service, and run. Each one allows midmarket companies to use SAP’s leading technology in conjunction with a partner’s unique IP to help grow their business. They can even certify their innovative solutions through the Partner Innovation Lifecycle Services group to earn a seal of approval that could further expand their customer base.
That’s where a solution like SAP Business Network Supply Chain Collaboration can also help. It offers businesses the visibility and transparency to help ensure delivery to the right customer at the right time, working to eliminate siloed processes to better collaborate with partners. This additional layer of insight can help midmarket companies make informed decisions to help prevent materials shortages, work stoppages, or demand fluctuations. And by allowing SAP partners to manage the end-to-end relationship, companies can ensure that they’re getting the guidance and expertise that can help them continue to grow.
In today’s rapidly changing business landscape, midmarket companies face unique challenges when it comes to procurement and supply chain management. SAP’s emphasis on serving midmarket companies with partner-driven solutions has led to significant growth in this sector, highlighting the importance of partnerships in driving success.
With powerful software, customizable solutions, and comprehensive support from SAP and its partners, midmarket companies can navigate complexities with confidence, ensuring their operations run smoothly to thrive in an increasingly competitive market.
Claus Gruenewald is head of Intelligent Spend and Business Network Partner Ecosystem at SAP.