New Research: Stop Waiting for a Supplier Network Revolution — P2P, Supplier Management and Beyond

Spend Matters is excited to announce the publication of our latest Perspective: Getting Past the Existential Connectivity Funk: Stop Waiting for the Supplier Network Revolution. Here at Spend Matters, most of our research titles are quite boring. But we hope this one caught your attention (give yourself some extra points if you already picked up in the literary analogy). We chose this title because in Samuel Beckett's Waiting for Godot, two chaps philosophize, debate and engage in quite a lot of self-pity while aimlessly waiting around for a figure they call Godot (who never in fact arrives). The entire play, depending on one's perspective, is an exercise in either rhetoric or existential thinking. But regardless of your vantage point, it's pretty clear that the protagonists accomplish just about nothing by the end. Inaction -- and the status quo -- end up ruling the day.

Waiting for Godot actually presents a number of useful lessons for the universe of supplier networks. For one, the great majority of organizations deploying supplier networks in any capacity to this date have realized a tiny proportion of their potential value, despite extensive planning, investment and, well, waiting. Just as Vladimir and Estragon were sucked into a world of apathetic ambition, current supplier networks (nearly all of which have focused 99% of their efforts on solving singular challenges rather than transforming buyer/supplier connectivity and relationships) initially aspired to greatness, but ended up amounting to little more than a supplement or replacement for EDI.

With apologies to Mr. Beckett, who clearly has many followers in the existing supplier network marketplace, our premise today is that a revolution is afoot in the supplier network world and that a new breed of networks -- or enhanced versions of existing offerings -- have the fundamental ability to do great things. The supplier network promise of tomorrow will be transformative for buying organizations. Spend Matters believes it is only a matter of time until open networks (with no or minimal entry barriers or forced transactional requirements) for suppliers begin to combine supplier management and other capabilities in a many-to-many fashion.

These approaches will unite a number of capabilities to create new value propositions for buying organizations, from integrated supplier management and search to global transactional connectivity and standards for transactions and information exchange. To eliminate duplication of effort, some will provide a single location for non-procurement (and procurement) stakeholders to manage up-to-date supplier information for special initiatives like CSR, diversity, risk, etc. At the same time, others will offer plug and play connectivity for P2P and transactional systems of record, regardless of the overall heterogeneity of an organization's systems environment or other existing supplier network connects.

This Spend Matters Perspective provides a basic, three-level maturity model for how companies will leverage supplier networks. Beginning with the Foundational Building stage, organizations will supplement first generation P2P connectivity with new, many-to-many network approaches in a single area. For supplier management, these might take the form of Aravo Assure-like offerings; for electronic invoicing and commerce connectivity, new models such as Trade Shift and Pagero are likely to drive increasing levels of buyer/supplier connectivity. Organizations are also likely to deploy a range of supplier discovery approaches leveraging many-to-many networks as well.

The second stage is Integrated Process and Management, where organizations will leverage network approaches that cross supplier management, P2P connectivity and supplier discovery bounds, integrating two or all three areas into a single offering. In this stage, suppliers will likely have a single portal into their customers to manage their own profile details, certifications and transactional content (not to mention being able to search for new business opportunities with existing buying organizations and new customers). At the third and final stage of maturity, Advanced Connectivity, organizations will embrace new types of business models built on top of the connectivity foundation underlying trading partner and relationship management network capabilities. These new use cases will help buying organizations to uncover entirely new opportunities, some of which we explore in this paper.

If you're curious about the future of supplier networks and how the network of the future (and some early examples today) can help your organization overcome challenges in P2P, supplier management and beyond, don't delay. And don't get into a funk! Download Getting Past the Existential Connectivity Funk: Stop Waiting for the Supplier Network Revolution today.

- Jason Busch

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