At Taulia Connect Tuesday, Hackett’s Amy Fong provided an overview of dozens of various Hackett Group metrics and benchmarks spanning procurement, accounts payable, treasury and related areas. Hackett is increasingly delving into certain aspects of technology as well in its survey work, including the usage of supplier networks to support the source-to-pay process.
While this specific data set is not new, we would still bet the poll results from a Hackett webinar in 2014 on which it is based is still directionally accurate today. Specifically, at the time, Hackett found that 57% of organizations surveyed were not using a single supplier network. Of the sample size, 18% did not use a supplier network, 24% had separate solutions for sourcing and processing orders and invoices, 24% had a single network to support transactions across “the entire process,” and 33% had a single solution for orders and invoices but required another network for sourcing.
What does this tell us? A bunch of ideas come to mind, but here are a few to chew on:
- The notion of using a single network across all procurement, accounts payable and treasury processes is a bit absurd. Just as companies often support and use different EDI providers and standards for transactional connectivity for direct spend and supply chain operations (e.g., logistics, warehousing, etc.) so too will multiple networks be used for sourcing, general supplier connectivity and more.
- Networks generally don’t play nicely with each other today. Even those that position themselves as “open” rarely interoperate (in practice) with others for anything but a sliver of transactions. It’s not surprising that most organizations are using different networks for different processes, but increasingly, process-based integration between network providers will become more important, especially across specific geographies.
- Network standards are a bit of a red herring, as networks themselves provide such a broad range of capabilities, and standards can involve document exchange, catalog content, supplier profiles/master data and much more.
As we’ve written recently, it’s critical to develop your own supplier network strategy. Don’t let a provider do it for you, lest it puts itself at the center of it.
Join us at the ISM and Spend Matters Global Procurement Tech Summit in Baltimore March 14–16 to learn more about how to create a network plan that puts your organization’s needs first.