Will Social Become a Paradigm or Destination for Procurement Technology?

SpendLead maxsim/Adobe Stock

As adults, many of us tend to obsess (without admitting to it) over specific social applications in our personal and business networking life. And we get worked up over those that our kids use for nefarious purposes (or to make fun of us as parents). Yet when it comes to procurement specifically, I’m not yet sure whether “social” will take the form of separate applications or simply become part of the fabric of the procurement suites and standalone tools we’re used to using already.

I’m selfishly motivated to investigate the topic because I, along with two colleagues at Spend Matters, am an investor in SpendLead (which incidentally, is soon to come out of beta). But as an analyst, I’d argue so far that supplier search and collaboration tools like SpendLead and social networking sites like Procurious are more of a sideshow for early adopters and curious sorts (like me) than main stage applications like LinkedIn.

The question is not just whether or not this will change (it most certainly will), but whether or not these capabilities will primarily reside in regular desktop and mobile applications versus separate social services. Users need fewer applications, apps and sites to log into, not more. So why not mirror the questions and capability within procurement suites today?

I’m pretty convinced this is the way things will go as a general rule. The market breakout for dedicated social applications, however, is still possible — just not from a “procurement user” perspective. Procurement is too narrow to justify its own set of social brands and applications.

The game-changers will likely come from those that truly change paradigms because they’re enabled by a social construct itself — for example, a social tool that has thousands of users leveraging it per hour helping with research on partners and suppliers, as well as customers for that matter (e.g., around supply chain risk or product differentiation). In this capacity, I could argue that social collaboration layered on top of networked risk applications like riskmethods (which are mashups already) are likely to be more killer social apps.

Generally, I’ve come to believe either social models favor either ubiquity or convenience. The former will only come from achieving critical mass to a point that the size/scale of a social network combined with specialized capabilities more than compensates against the size of incumbent alternatives. The latter will come from embedded capabilities in applications, which is more of a sure bet from an adoption and usage perspective (e.g., social contract authoring and document collaboration within Coupa).

This suggests to me the long-term odds are against SpendLead and Procurious relative to LinkedIn, for example. But if either crosses that tipping point, they could be huge. Or, alternatively, if they manage to drive adoption as an application for procurement teams as part of a top-down adoption strategy (i.e., they’re “sold” to an organization), they could be self sustaining, although it’s the bottoms-up approach to date that has created massive scale among the very top social networks and network valuations.

What do you think?

Voices (2)

  1. Philip Ideson:

    I agree that the data that is available through today’s social channels will play an ever increasing role (likely more so for Direct categories for the reasons that Gary stated and perhaps offshore outsourcing that are more susceptible to geopolitical risks). What is interesting though is that I have yet to see a solution that powerfully harnesses the level of information that is available outside of creating news feeds within a news feed – or with very specific use cases that seem to involve human monitoring vs. AI (such as monitoring risks related to electronic manufacturing in rural China).

    I am very interested to see the power of the collective crowd when it comes to supplier discovery, and solutions like the aforementioned SpendLead and tealbook.

    The inhibitor though – and I don’t know if this will change in the short term – is that a true Yelp for B2B (as an example of crowd driven supplier discovery in the B2C space) requires participation at scale and a willingness to share information (albeit anonymously) in a way that I think we have been hesitant to do as a profession to date.

    Interesting times!

  2. Gary Hare:

    Jason – great entry, and something we all need to start thinking about. I agree with your assertion that social technologies will probably end up as a desktop component of existing e-procurement and supply chain apps. I’m also starting to think that social technologies, properly applied, could have a much greater impact on direct material e-procurement, where, as you stated, due to the complexity of supply chains compared to indirect, real-time collaboration can improve efficiency and quality, which also lowers supply risk. Good stuff, keep it coming!

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