In the days surrounding SAP 2021 financial results, the company announced not one, but two business developments that expand SAP offerings and opportunities on several fronts, including supply chain and contract management.
The SAP press release regarding the acquisition of Taulia, a financial services and working capital management firm based in San Francisco, said that “The move is aimed at giving companies better access to liquidity and improving their cash flows.” Additionally, “The acquisition further expands SAP’s Business Network and strengthens SAP’s solutions for the CFO office.”
Commenting on the SAP investment in planned product and service developments with Bellevue, Washington-based Icertis, which specializes in AI-based contract management systems, SAP CEO Christian Klein said, “The expanded cooperation with Icertis will help our customers take advantage of market-leading innovations for contract management from Icertis, while managing core business processes with SAP solutions.” Klein added, “This partnership is a great complement to our portfolio, with multiple touchpoints to SAP systems across ERP, finance, procurement, sales, and HR.”
Immediate and Ongoing Opportunities
Expanding on the announcements in an ASUG interview, SAP Head of the Center of Excellence for Working Capital Management, Thomas Mehlkopf, said that SAP and Taulia—a longtime SAP partner—together tackle a current, pressing need.
“At companies of all sizes, challenging economic conditions and severe fluctuations in supply and demand have made working capital management a top priority for CFOs, procurement officers, and treasurers,” he noted, adding that more than 80% of the Taulia customer base run an SAP ERP. Airbus, Nissan, and AstraZeneca are among the joint customers.
Mehlkopf said that SAP will leverage Taulia’s offerings and the SAP CFO solution portfolio, especially Treasury and Cash Management solutions, along with integration into SAP core business software and the SAP Business Network. Taken together, the organizations will “help businesses improve their financial position and seize growth opportunities … [as well as] make their supply chains more resilient. Supply Chain Financing is also increasingly used to achieve sustainability and ESG [Environmental, Social, and Corporate Governance] goals by creating financial incentives for trading partners/suppliers.”
Last week, in further comments on the Icertis partnership, SAP Chief Marketing and Solutions Officer of the Intelligent Spend and Business Network, Etosha Thurman, also referenced ongoing economic and supply chain challenges.
“The current economic environment and recent supply chain challenges have caused businesses to take a closer look at the strength of their supplier relationships as they seek to minimize risk and ensure the intent of their agreements is fully realized,” she said. “Traditional contract management is often manual and siloed, creating inefficiency and risk while leaving value unrealized. The Icertis solutions help structure and connect data within contracts across an enterprise, enabling a business to unlock the value of contract data, increase efficiencies, identify and mitigate potential risk throughout the contract lifecycle.”
The expanded partnership will lead to a joint product road map and deeper technological integration, building “… on the existing relationship between SAP and Icertis, which began in 2020 to transform the source-to-pay and lead-to-cash processes through the integration of Icertis Contract Intelligence with SAP Ariba and SAP CX solutions,” Thurman added.
The Expansion and Evolution of SAP Business Network
In comments on the importance of these developments, Geoff Scott, ASUG chief executive officer, noted that “SAP's recent partnership with Icertis and acquisition of Taulia represent the next generation of Business Networks for SAP users, resulting in streamlined operations and seamless business transactions. All organizations, but especially small, mid-size, and historically complex organizations, will benefit from access to Icertis and Taulia with simplified and data-driven business transactions and operations.”
Meanwhile, David Wascom, ASUG senior VP of executive programs, added that “Business Networks play an integral role in SAP’s Intelligent Enterprise strategy. The acquisition of Taulia and [the] partnership with Icertis should play a key role in enhancing SAP’s Business Network solutions by using AI to improve everything from contract and supplier management to invoicing and discounting.”
Joshua Greenbaum, principal at Enterprise Applications Consulting, also pointed to the Business Network strategy’s positive evolution, given the Taulia and Icertis relationships. “Taulia’s ability to help suppliers manage capital fulfills an important promise of a business network: allow network members to leverage the connectivity and data in a network to improve backend processes such as order-to-cash and supplier management. Taulia’s ability to manage liquidity will be an important incentive for suppliers to sign on to the SAP Business Network and manage the essential cash and trade finance processes that underly the core supply chain, procurement, and asset management capabilities in the Network,” he said.
Greenbaum added: “Similarly, Icertis allows a core document in any business relationship—the contract—[to] be better leveraged by members of the Business Network, again with the goal of improving the backend processes that tie directly and indirectly into the Business Network.”
Principal Analyst and VP at Forrester, Duncan Jones, reported that Icertis surfaced as the Contract Lifecycle Management leader in The Forrester Wave™ research last year. “It’s good news for SAP customers that SAP has decided to partner with Icertis rather than acquire it. SAP can help Icertis further improve integration with S/4HANA, leaving Icertis’s leadership free to continue to focus on innovation in the CLM space. The future of business applications is like this, ecosystems of broad platforms and focused partners.”