ICYMI: Trends and Predictions in Sourcing, Supplier Management, CLM and More

It was Webinar Day last Tuesday — and a historic day of sorts for Spend Matters.

For those of you who missed it, last week Spend Matters Founder Jason Busch presented a webinar live from the U.K., with Spend Matter UK/Europe Managing Director Peter Smith some 50 feet away, doing another webinar live. “It’s the first time we’ve had two analysts in the same building doing a webinar at the same time,” Busch said.

Busch’s webinar, Sourcing, Contract and Supplier Management: Predictions and 2017 Tech Trends, looked at four areas within the strategic procurement technologies landscape — spend/supply analytics, strategic sourcing (e-sourcing), supplier management and contract management.

Definitions (A.K.A. Housekeeping)

Before diving into what he called “the fun stuff,” that is, predictions and customer and tech trends for each of the four areas, Busch gave overviews for them (the “housekeeping” part of the webinar):

Spend/supply analytics — A class of technology often including both software and services companies, analytics solutions aim to provide insight into organizational spending by combining different datasets. These might include purchase order information and p-card data. “When [most companies today] buy spend analytics technology, they’re actually buying a solution,” Busch said.

Source: Spend Matters’ Sourcing, Contracting and Supplier Management Landscape Definition and Overview

Strategic sourcing — Also known as e-sourcing, strategic sourcing technologies allow companies to define and implement specified tendering/sourcing processes across simple and complex categories, from strategy development to award decisions.

Supplier management — What used to be a post-sourcing and post-contracting area has now expanded to supplier lifecycle management.

Contract management — These tools improve the speed and quality of the contract process, enhancing procurement’s efficiency overall. “Contract management means different things to different people,” Busch said. “For some it’s just a place to store your contracts. For others it means truly managing the lifecycle of contracts.”

And Now, the Fun Stuff!

Here’s a quick run-down of some trends and predictions that Busch discussed on the webinar.

Trends in spend/supply analytics:

  • Front-end visualizations and dashboards are becoming a competency for certain vendors, and they’re highly valued by customers.
  • The front end is going “third-party” BI, no questions asked.

Trends in strategic sourcing:

  • Ease of use is ruling the day in certain selections. And from the tech end, user interfaces are getting better and better.
  • The merging of suite value propositions with strategic sourcing is an increasing value proposition for future technology innovation.

Trends in supplier management:

  • New strategic sub-sectors, such as supplier relationship management, supplier development and supplier collaboration, are emerging.
  • Architectures remain conservative, with little use of networks and platform-as-a-service (PaaS) models, let alone blockchain.

Trends in contract management:

  • Suite vendors are simply not keeping up with specialists. The progress that specialist vendors have made in the past 18 months have been off-the-charts.
  • New types of analytics and collaborative solutions are complementing (but not replacing) advanced CLM solutions.

Predictions:

  • Network and/or suite-based vendors will accelerate the combination of benchmarks/KPIs with analytics offerings.
  • Trade financing, treasury and working capital analytics will become an offshoot of spend analytics.
  • Suites will get better and better as analytics and supplier management become inseparable from core sourcing activities.
  • Blockchain is going to be “revolutionary” for supplier management. “This is probably our biggest prediction,” Busch said.
  • The contract will become more of an intelligent “system of commitment” that is infused into other processes, optimizing how commitments are made (e.g., pegging contracts to risk and compliance).

The above is not even a quarter of the trends and predictions that Busch talked about, but this post will be far too long if I shared all of them. I encourage you to set aside an hour and watch the webinar recording for yourself.

Notable Quotables

On keeping tech hopes in check: “There are some clever technologies like AI and machine learning making their way into places like spend analysis, but in general the tech trends are not as sexy as [other] internet technologies.”

On data cleansing and classification: “As my colleague Michael Lamoureux likes to say, the secret sauce of rules-based classification is smart people in the back room in Chicago, New York, California or Bangalore looking at data sets and making sure that the rules that have been applied are very accurate. With the machine learning approach, you’re actually training the system to get to a very high level of accuracy.”

On the Google Translate analogy: “Google changed their machine learning algorithm, and all of a sudden Google Translate became truly exceptional, [even for] Asian languages, Hebrew and Arabic. And it’s because it started taking a trainer approach in terms of using machine learning.”

On innovation in spend analysis: “You can largely count the number of spend analysis vendors on one hand who get more than $5 million in revenue before getting acquired by someone else. You can really see the process of creative destruction. New technology comes out, new vendors pop up, they scale, people are thrilled with it, they get acquired and then six months later somebody new pops up. Of all the areas of procurement, this is probably one that’s seen the most cycles of innovation.”

On e-sourcing technology: “A few years ago, technical prowess and capability [ruled] this market… But today, you can lack 50% of the features and have a great front end from a usability perspective, and some customers are totally fine with that.”

On blockchain… and tuna: “If we think about the farm-to-table concept, if you go into a high-end sushi restaurant or you go into Whole Foods, it’d be very nice to know where that fish came from originally. And there was actually a test case for blockchain applied to tuna.”

Check it out! Sourcing, Contract and Supplier Management: Predictions and 2017 Tech Trends

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