Oracle offers sourcing software as a service

Oracle on Monday took a step in the direction of on-demand ERP with the announcement of Oracle Sourcing On Demand, a SaaS module for handling the purchase of supplies and services.

The new product is based on components in Oracle's flagship on-premise ERP (enterprise resource planning) system, E-Business Suite Release 12.

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The software allows various parties involved in the sourcing process to collaborate on decisions, ensuring the best deals are struck, Oracle said. It also "meets the highest security standards," includes packaged integrations with applications like Oracle Purchasing, and provides standard tech support as well as a help desk. Pricing information wasn't immediately available.

In providing targeted SaaS (software as a service) offerings along with traditional ERP systems, Oracle is following a path similar to its rival SAP, which already had an on-demand sourcing application, and is expected to announce a number of additional SaaS services later this year.

While Oracle has sold on-demand CRM (customer relationship management) software for some time, it makes sense for it to start with sourcing on the SaaS ERP side, since a number of specialized companies have already proven there's a viable market, said 451 Group analyst China Martens.

Other on-demand sourcing and procurement vendors include PowerAdvocate, Ketera and Coupa, the last of which was formed by former Oracle employees.

Companies that are setting up shop in a new country, for example, might be attracted to the SaaS model for sourcing, since they could get it up and running more quickly, Martens said.

"It's definitely an area we've seen lend itself to the SaaS model," she added. "It's a cool thing for Oracle to do here. ... For Oracle, the question now is do you look at other pieces of ERP [for on-demand]?"