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.”