Is SAP Now the Number 1 in CM/CTRM?

Back in May 2014, ComTech had its first briefing from SAP in regard to its efforts around Commodity Management. Back then, the SAP Commodity Management solution had been licensed by 60 companies and was in use at 10 we were informed, and the solution itself we felt was lacking some functionality in trading, risk management and book structures, and so on, but well suited for commodity management. In fact, the call led us to attempt define Commodity Management and contrast it to ERP and CTRM. Of course, SAP was always going to be a presence in the market by virtue of its dominant ERP and supply chain capabilities within oil and gas and other commodity companies. From the very early days of CTRM, being able to integrate with SAP was often a key requirement.

So roll forward to July 2019 and I had another briefing from SAP (they happen around twice a year). I talked with Ms. Anja Strothkaemper, VP SAP Agribusiness and Commodity Management Solutions and Mr. Harald Schlueter, Senior Director. These days, SAP has more than 200 licensed customers for the solution and is coming off the back of a record H1 2019. I wanted to know what accounted for this level of success.

Our perspective is that SAP’s success is down to several overlapping factors;

• Via both very serious and committed significant investment on the part of SAP and also as a result of co-innovation projects with key customers and users. SAP has been able to add significant functionality to its SAP Commodity Management and SAP Agricultural Contract Management solutions since 2014 as well as start to ensure tighter and more commodity-focused integration with other SAP products used in the commodities area to the point that SAP has now moved beyond the confines of CM and is offering fairly robust CTRM-type functionality as well. As Anja told me – “The product is a lot richer and there is real value in CM integrated into ERP,”
• As Anja points out, the investment made by SAP in migrating the solutions to the SAP S/4HANA software has also had a massive impact. As she told me, as customers upgrade to the SAP S/4HANA software, they also take the opportunity to see what else SAP has to offer and those with a commodities aspect to their business are interested in the Commodity Management functionalities. She credits the unique combination of ERP and CM on the SAP S/4HANA suite approach as being behind much of their success. “All SAP customers need to plan for 2025 when support for SAP ERP will officially end and they naturally look at what we have that is new – including SAP Commodity Management on SAP S/4HANA,” she said,
• As a part of this last point, SAP has innovated a variety of tools, solutions and so forth in areas like blockchain, AI, ML, analytics, reporting and much more, all of which can be utilized by SAP users to build and deploy solutions,
• SAP has some very serious entities committed to, championing and using its SAP Commodity Management and SAP Agricultural Contract Management solutions across all commodities, segments and geographies – particularly top tier names. This in of itself is helping to promote and establish SAP as a contender,
• From a ComTech perspective, we also believe that the acquisitive activities of ION can only help SAP. Those seeking an alternative to an ION solution especially if an SAP ERP user, have a natural alternative to consider (along with over 100 other solutions I might add).

Of course, this is not an exhaustive list and there is the other side to the coin where SAP maybe too expensive and too broad and functional for some including the bottom tier and bottom of the mid-tier. However, the knowledge that SAP has gone from 60 to over 200 licensed companies in a 5-year period, has added 20 new customers in H1 2019 alone as compared to 30 for all of 2018, demonstrates that SAP has real momentum in this market and arguably, it may already be the #1 CM/CTRM supplier on pure revenue terms.

In the coming weeks, I will be providing more input from SAP based on the last briefing getting into more details on functional enhancements, strategies and roadmaps. Stay tuned.

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