Should We Kill or Evolve the Catalog?

Eric-BOULANGER_AdobeStock_guillotine_08142016

We’ve long written in favor of catalog management as a form of controlling indirect spend. For starters, a catalog-driven approach to controlling buying activities is pretty much standard practice in Europe (for companies that have adopted a technology solution for procure-to-pay activities). In the U.S., spend going through true buyer-managed and supplier-managed catalogs, as a percentage of overall buying activity with P2P platforms and networks, is material. Although, to be accurate, we should also point out that punch-out, web storefronts and marketplaces (e.g., Amazon Business) capture a substantial percentage of spend as well, even though many of these are really catalogs in disguise (in which procurement has less SKU-level control).

Catalog Benefits

Moreover, catalog-driven approaches can prove helpful in specific scenarios for procurement organizations, including:

  • Managing complex buys where a combination of items is important (e.g., kittling/bundling)
  • Directing users to preferred services (e.g., installation/configuration) and associated pre-negotiated pricing for non-SKU elements of a buy
  • Supporting complex purchases that are part of a particularly complex project and are linked with each other (e.g., plant overhaul/maintenance)
  • Providing insight into detailed, “beyond SKU”-level information such as detailed drawings, associated bill of material information and related content
  • Mapping various numbers and master data (e.g., linking internal/ERP part numbers to distributor part numbers to manufacturer part numbers)

These points aside, the catalog approach to P2P came to maturity during a time in which other available technology was immature or non-existent. For example, the concept of effective federated search capability, in which a search and shop tool could pull information to compare different options from various catalog and non-catalog sources and present rich content back to the users — in both comparative and noncomparative scenarios — is a relatively recent advance, at least at scale deployment.

Black Boxing the Buy

Moreover, recent black box advances to shopping and search can isolate the buyer from the actual process to shop for the best deal. IBM shared a video at the Spend Matters/ISM Global Procurement Technology Summit that showed a business user speaking into his phone to express his buying requirements for a particular scenario (in this case, made more complex based on being in the middle of a travel itinerary) and then having Watson come back with preferred options.

So let me posit a somewhat argumentative question to make a broader point: Is it time to kill the catalog?

I don’t think it is entirely. But I think we’re getting to a point with the rise of technology and managed services in which the end is something we can see on the horizon — at least to a point at which we remove the end user from having to shop and identify options using a catalog. In fact, I’d wager that by 2025 catalogs will be a tool for back office procurement content management in which the user is largely removed from ever having to deal with them directly for typical “buys.”

Imagine a world in which business users don’t have to worry about duplicate catalogs (and items), finding the right catalog, finding the right products or having to remember a logon ID to their P2P application — or a marketplace — simply to search.

Such a world might be closer than we think.

Of course this presupposes an environment (one coming fast, I might add) in which the shopping interface is very different than in the past. Just as we now order up movies and TV shows with Apple or Amazon Fire devices with our TV by speaking into a microphone, the notion of searching for a given item could go the way of old ERP-style user interfaces in which it takes five clicks to even begin to remotely get into the right place within an application to evaluate different options.

Is There a Post-Catalog Age?

In this post-catalog age, I can see numerous new interfaces and mediums for buying. These of course include verbal or spoken commands (e.g., “I need XYZ — what are my options”). But they also include the following:

  • Managed services offerings that blind the process to the requisitioner by taking a behind-the-scenes approach with a process that starts with a text-based or email-based entry to express interest around a given need in which a user does not need to know what is happening behind the scenes
  • Location-based services that leverage GPS and other information (e.g., items in transit) through mobile devices
  • Automated replenishment for consumables or even assets with a certain lifecycle based on the best option at the time (which could include buying from inventory)

What do you think? Is it time to think about killing the catalog for business users that need to make purchases?

As I give this some more thought in the next installment in this investigation, I’ll share my opinions on how catalogs don’t necessarily provide the lowest total cost to organizations — even when pricing has been pre-negotiated.

Discuss this:

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