GPTS Content

The ISM and Spend Matters Global Procurement Tech Summit (#ProcureTech2016) is a wrap. Despite the hurdles in marketing an event at the same time as Ariba LIVE (not by design!) and with less than seven months from finalizing the idea through to executing it, nearly 300 people took a chance to attend the first-time event. While the perfectionists in us would have liked to tweak a number of things, the event was, based on the feedback we received from participants, a smashing success. And next year will be even better.

Earlier this morning at #ProcureTech2016, Professor Robert Handfield, of the Poole College of Management, North Carolina State University, gave a must-attend talk on rethinking the future of procurement technology by putting data first — and how to ensure you’ve got the right set of information at the core of sourcing, supply chain and supplier engagement activities.

Prentis Wilson, who oversees Amazon Business, just took the stage at the ISM and Spend Matters Global Procurement Tech Summit and provided an overview of Amazon’s solution for business. (Follow the event live at #ProcureTech2016!) In framing Amazon Business, Prentis suggested that Amazon Business is “A B2B marketplace — a marketplace of sellers and a whole suite of business friendly technology.”

Aside from the U.S. government and Wal-Mart, we’d be hard pressed to point out another organization with similar massive procurement spend as IBM. At #ProcureTech2016 this morning, IBM’s Vice President of Global Procurement Dan Carrell gave a splendid talk on how IBM is transforming its own operations through cognitive procurement.

The ISM and Spend Matters Global Procurement Tech Summit (#ProcureTech2016) kicked off this morning in Baltimore with Anne Rung taking the stage as the morning’s first keynote. Anne centered much of her talk on federal IT procurement, which within the Office of Management and Budget (OMB) represents over 10% of the overall Federal procurement budget — $51 billion in IT spend, to be precise).

Many people have different opinions of IBM. Most tend to view it as a sprawling technology and services powerhouse that is too big to fail, but it also seems to constantly be fighting every technological shift that many predict will bring it down. But IBM is also an extremely innovative firm and is actually the world’s top generator of patents. I’m personally very excited to see what they’ve been cooking up lately when Dan Carrell comes to our upcoming procurement technology conference in March to share some of IBM’s developments.

There are many who would argue that direct procurement is procurement. Yet I typically define direct procurement, in the broadest sense, as referring to the sourcing, buying and management of ingredients, materials, parts, components, assemblies, packaging and related items, and services associated with “spend” that is accounted for under costs of goods sold (COGS) from an accounting perspective.

To say that the supplier network business model itself has crossed the chasm would be an understatement. For companies like Ariba/SAP, network revenue has become one of the very core components of overall growth — and the network model itself has become a key value proposition to customers, including supplier enablement, transactional connectivity and supply chain risk management. We will be talking about networks and related enabling technologies, including cloud, platform as a service (PaaS) and blockchain, with ISM at the Global Procurement Technology Summit taking place on March 14–16 in Baltimore.

Within procurement technology, e-invoicing is a simple market to understand on the surface and perhaps the most vexing to analyze as you peel the solution onion — its underpinnings are perhaps more influenced by new and emerging technology than any other related solution area. We encourage Spend Matters customers interested in learning more about what’s changing with e-invoicing and related areas to join us for the ISM and Spend Matters Global Procurement Technology Summit on March 14–16 in Baltimore.

The e-procurement market, one of the original technology segments to center on automating and improving procurement, is starting to go through a number of fundamental shifts. These changes are far more dramatic than the initial “cloud transformation” that began when Ariba and Coupa began to migrate standard deployment models away from the CD world. (It should be noted both of these providers, especially Coupa, have evolved dramatically since this initial shift as well.) We recently started to cover some of these new shifts in the first installment of a Spend Matters PRO research series: E-Procurement Market Outlook 2016-2018: 10 Technology and ‘Mega’ Trends.

Core e-sourcing has taken a bit of a hiatus as a standalone technology buying priority for many procurement organizations of late. If anything, basic solutions have been bundled in with broader spend analytics, supplier management or even full-suite deals, and solutions designed to tackle specialized categories or advanced sourcing have created a market niche unto themselves. Granted, a handful of lower-cost solution providers have continued to plod the market with their wares. And some have enjoyed solid growth, albeit from a tiny base.

The circle of life includes death, and traditional procurement is dying. The sooner that procurement organizations, and the solution and service providers that serve them, recognize how the various aspects of the old procurement model are dying, the more quickly they can plan for rebirth. Honestly, I think procurement today is really not that different from 10–15 years ago, but procurement 10 years from today is going to be very different indeed, and it’s going to be because of technology.