SAP has been positioned in the Leader Category of the 2026 IDC MarketScape for AI-Enabled Direct Spend Vendor Assessment.*
Optimize procurement and invoicing processes through supplier collaboration
We believe this recognition reflects SAP’s long-term investment in helping manufacturers connect sourcing, engineering, planning, and supplier collaboration on a single foundation.
Direct materials procurement doesn’t get enough credit for how hard it actually is. Unlike indirect spend, direct materials sit at the intersection of engineering, planning, finance, and supplier relationships—often all at once. A design change triggers a sourcing event. A commodity price spike ripples into contract terms. A supplier quality issue lands on the production floor before procurement even knows it happened.
The organizations that manage this well don’t just have good sourcing tools. They have connected systems, trusted data, and the ability to act quickly when conditions change. Solving for that complexity is what SAP’s direct spend portfolio is built to do.
Connecting design, sourcing, and execution
SAP’s direct spend offering is built with an industry-specific lens. A cookie-cutter approach to procurement business processes does not work for direct materials.
An engineering-oriented industry like automotive or aerospace, where a design change can trigger a sourcing event, has fundamentally different needs than a brand- or asset-oriented industry such as consumer goods or chemicals, where commodity exposure and supplier scale dominate. SAP builds for both, with purpose-built offerings tuned to how each actually works.
What our offerings share is a single, unbroken data model running from new product introduction through sourcing, contract award, and purchase order execution, all within SAP Business Suite: no bolt-on connectors, no manual handoffs between systems.
This matters more than it might seem. Data fragmentation across the design-to-source-to-settle workflow remains one of the biggest barriers to AI delivering real value in direct spend. When procurement decisions are connected to engineering, planning, supplier, and financial data on a shared foundation, AI has meaningful context to work with.
A network and ecosystem that extends the core
The sourcing suites are the center of gravity, but what surrounds them is equally important for manufacturers managing complex, multi-tier supply chains.
SAP Business Network connects millions of trading partners across roughly 190 countries, with more than US$7.7 trillion in annual commerce flowing through it. The network supports forecast collaboration, purchase order execution, inventory management, logistics visibility, quality processes, and supplier communication. For global manufacturers managing complex supply chains, that scale can be operationally significant.
Customers are already seeing the benefits of a more integrated approach to direct spend. For example, global automotive supplier Multimatic selected SAP’s direct materials sourcing solution because of its close integration with core ERP processes, including bill of materials management, production planning, and cost calculation. By connecting sourcing more closely to product development and manufacturing workflows, the company is helping procurement, engineering, and suppliers work from the same foundation throughout the product life cycle.
Additional SAP capabilities extend the process further across product development, commodity management, supply planning, supplier collaboration, financing, and analytics. Together, these capabilities help organizations manage direct spend as part of an integrated process that spans from early design collaboration through supplier payment, supported by a unified data foundation.
Taken together, these capabilities span a much broader scope than traditional sourcing software, from early design collaboration through supplier payment, all governed on SAP Business Data Cloud as a unified analytics foundation.
Where AI stands today, and where it’s going
Today, SAP delivers AI-powered supplier and item recommendations, invoice data extraction, category strategy insights, supplier risk scoring, and Joule capabilities embedded throughout the suite. These are production capabilities already helping customers streamline procurement processes.
Looking ahead, SAP plans to expand its AI capabilities across the direct spend life cycle, with new agentic experiences focused on areas such as market intelligence, supplier discovery, RFx orchestration, negotiation support, contract authoring, and supply chain impact analysis. These innovations will be delivered through Joule Work and Joule Studio 2.0, a no-code/low-code environment built on SAP Business AI that enables organizations to create and manage agents grounded in live business data and end-to-end process context.
The foundation underneath this road map is what makes it credible. Agents are only as good as the data and process context they can access. When that foundation is fragmented across disconnected systems, AI adds noise as often as it adds value. When it’s unified, agents can execute with greater relevance and accuracy.
Who this is built for
The SAP Ariba offering foo direct spend works with any ERP backend, with the added benefit of integrating out of the box with SAP Cloud ERP. For aerospace and defense customers with data sovereignty requirements, SAP offers deployment options for sovereign cloud that few vendors in this space support. For brand- and asset-oriented enterprises, a consolidated source-to-pay platform spanning both direct and indirect spend can simplify governance while reducing complexity.
For manufacturers operating complex global supply chains, the value of a natively integrated approach is straightforward: fewer manual handoffs, better visibility across functions, faster response to disruptions, and AI that can draw on connected business data rather than isolated point solutions.
What this recognition means to us
We’re grateful to the customers and partners whose real-world feedback shapes how we build these products. We believe an IDC MarketScape recognition reflects their experiences as much as it reflects our road map, and we don’t take that lightly.
This recognition energizes us. For more than 50 years, SAP has helped organizations run their most critical business processes, and direct spend is one of the areas where that experience comes together most clearly. We’ll continue investing in deeper integration, broader network capabilities, trusted AI, and the industry expertise our customers rely on. We’re grateful to the customers and partners that continue to help shape these solutions and help us deliver meaningful innovation across the direct spend life cycle.
Fang Chang is executive vice president and chief product officer for SAP Procurement and External Workforce Solutions at SAP.
Baber Farooq is chief marketing officer for SAP Spend Management.
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*IDC MarketScape: Worldwide AI-Enabled Direct Spend 2026 Vendor Assessment, IDC #US54900426, September 2026.
