Catalogs Get No Respect — and That’s a Mistake Pierre Mitchell - November 3, 2015 10:15 AM | Categories: Category Management, E-Sourcing, Procurement Systems & Architecture, Purchasing Process, Technology | Tags: Sourcing & Categories, Webinar When you think of electronic catalogs, do you get excited? Probably not. My colleague Jason Busch penned a piece on this last week that needed a retort. Although you might not find catalogs very sexy, if you look at the data on how the best procurement organizations use them properly, and the performance uplift those organizations get, you probably would. We’ll cover this in a webcast we’re doing tomorrow. (Sign up here.) The problem, though, is that first-generation catalogs have been limited to “low-hanging fruit” spend categories focused on SKU-based supplies (office, safety, lab, simple MRO, etc.). But, as you look to more complex and impactful spend categories, e-catalog adoption drops rapidly. Why? Part of it is technical and “plumbing.” There is still too much dirty data getting replicated across too many systems being on used by too many. Punchout is clunky and poorly controlled. Content syndication to local e-procurement systems continues to be a painful process. And data models are far too narrow and restrictive to express the real attributes of the products and services you are trying to buy. Yet, before we throw out electronic catalogs based on their current incarnations and implementations, it’s important to look at where procurement organizations are trying to go and how next-generation catalogs will look. And, no, this not the same as “next-generation horse-drawn carriages!” If you don’t like the term, then just call it an “information source for the products and services that you buy.” Seems like you’d want to get that under control, right? Procurement organizations are trying to do many things that next-generation catalogs can support: Lower the total cost of ownership across the lifecycle of a spend category. For capital equipment, this may be a large complex sourcing project upfront, with ongoing maintenance, repair and operations (MRO) coming later from deeper category-specific and role-specific support without having to buy a completely new deep procurement system. This means not only richer sets of attributes around the products and services but also better workflow and personalization on how you consume that supply, a seemingly conflicting desire to provide more intuitive requisitioner support while also supporting risk, compliance and cost requirements. This is all about “guided buying.” Segmenting not just your supply chains but also your procurement and supply chain processes to align to those segments. For example, tail spend management is a big topic, and flexible catalogs can be used for such smarter spot buying, or smart forms. Smart forms and better search not only enable guided buying but also provide a much more intuitive and efficient feedback mechanism from P2P back to sourcing. This feedback loop is gravely missing at so many companies — even some of the best ones. The mega move to services. Everything is becoming a service: technology, distribution, arrangements. Entire swaths of business processes. So, you better be good at buying and managing services. Unfortunately, catalogs have frankly sucked at supporting services. This is starting to change, but it also requires some reimagining of the “catalog” metaphor itself. It’s not just rate cards anymore. You get the idea. And this is just the start. Consider the emerging area of predictive analytics and artificial intelligence: Will Web-based agents finally allow better cross-site intelligent unified catalogs? Will next-generation catalogs monitor user behavior to provide a better experience for them? Will better standards and service provider models emerge to enable less friction across the B2B buying experience? Will a broader view of catalogs support better supplier discovery by enabling deeper supply discovery of the products and services themselves rather than just suppliers hanging out their proverbial shingles? As manufacturers being to make their products and supply chains smarter through improved telemetry via the Internet of Things, can catalogs become more intelligent to signal to humans when those parts need attention (aka predictive maintenance on steroids)? There’s still a lot of runway, folks, and still a lot of problems to solve. But the good news is as these problems are solved, we’ll start to see performance improvements in managing more complex spend categories that we have seen enabled in the simple SKU-based supplies categories. And that’s a good thing. 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