CIO — Customers have a message for SAP: Your SAP supply chain mojo has not been rising. And we're not happy about it. Among the myriad, daunting challenges facing SAP's new co-chiefs—and there are many—is what to do about its core supply chain management product portfolio.

New co-CEOs Bill McDermott and Jim Hagemann Snabe have seemingly inherited both a blessing and a curse with SAP's supply chain management software stack: A large and loyal installed customer base that is, according to a new report from AMR Research VP of supply chain research Noha Tohamy, "becoming more vocal in demanding innovative SCM products that can support their strategies of standardizing on SAP."

In other words: Customers are desperately seeking SAP SCM innovation.

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Yet SAP has long relegated SCM to the status of RHSC (red-haired step-child), and the company has stumbled articulating its SCM and supply chain planning roadmaps, according to Tohamy.

"Overall," she writes, "the software giant has been sluggish in bringing to market an SCM offering that makes SAP not just the largest SCM vendor in revenue, but an innovator and leader in meeting increasingly complex supply chain needs."

The report lists the following "exhibits" in her allegations:

A. "On the supply chain planning front, expanded functionality and market presence have come more from its partners like SmartOps rather than the mother ship. And from a services standpoint, many of the successful implementations of APO, SNC, and GATP were driven by SAP's implementation partners, ranging from Infosys to Bristlecone."

B. "SAP has yet to offer a cohesive sales and operations planning (S&OP) product. The software vendor halted its S&OP development efforts when it acquired Business Objects, making the decision to migrate its S&OP capabilities to that platform. But in doing so, it lost many precious opportunities to expand its share in a product area that still ranks high on the priority lists of users."

C. "SAP gets mixed ratings on expanding supply chain management into the domains of new product development and distributed manufacturing. The company has finally invested in product lifecycle management (PLM) improvements after years of slow response to client needs...but frustration remains with the depth of discrete industry product data management or industry-specific formulation."

D. "SAP's Perfect Plant vision is to optimize manufacturing's assets and performance in concert with business goals. This requires connecting plants with ERP, but customers are often confused with the perceived overlapping capabilities of SAP MII and SAP NetWeaver PI."

E. "SAP has made little inroads in its SaaS SCM strategy in a market that continues to see growing interest in this model."

Why are these developments all somewhat surprising? It's because SAP owns ERP, and supply chain management is like a first cousin or nephew to ERP and customers still favor single-vendor setups. But Tohamy alludes to fact that the competition—including JDA/i2 andManugistics—has moved faster and offered a clearer vision.

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