Procurement Trends 2013 (part 3) – Tools and Technology

So, let’s look now at trends and expectations in the area of procurement and supply chain technology in 2013.

One area of potential is undoubtedly how procurement technology will spread into smaller firms. Jason Busch at Spend Matters US is covering this in some depth this week, whilst coincidentally I was interviewed yesterday by a firm who are preparing a report on a similar issue. We will come back to this but do read Jason’s first article here  if you’re interested.

In terms of larger organisations, the major developments will see more moving beyond basic P2P and eSourcing to look more seriously at Supplier Information, Contract, and Risk Management tools.

Supplier Information Management, linked to Risk Management, will continue to be a hot topic, as more procurement organisations realise that putting the supplier at the heart of their procurement value delivery strategies is the sensible way to go. SAP will get behind their exciting Infonet product, Achilles will continue to exploit their unrivalled global on-the-ground capability, Aravo will look to move beyond their US base, and the dark horse in this market is IBM who inherited Xcitec when they bought Emptoris last year. And there’ll be some excitement in the Supplier Information Management solution provider market shortly.  No, that’s not wild speculation, we can’t say anything more yet but watch this space.

In the contract management area, Seal Software will have a great year as organisations for the first time see an easy route to getting to grips with their entire contract portfolio. Perhaps that will stimulate more CPOs to take the lead on contract management process, tools and governance across their organisations? We think they should.

In P2P, Coupa will continue to make waves, but as SAP and Ariba integration steps up a gear, they won’t have things all their own way. Rationalisation will actually mean that strong national level providers (Proactis, Wax Digital, b-pack, Onventis, Gatewit, etc) have the chance to get on more customer short lists. But winning deals at workable margins will continue to be tough as the big boys get aggressive. Basware are an unknown quantity here – surely they must acquire or be acquired this year?

e-Invoicing and particularly supply chain finance / dynamic discounting will be hot topics this year, and there will be more exciting products, more customer interest, and  (we hope) a breakthrough in terms of more CPOs taking this area under their wings. OB10, Tradeshift, Oxygen, Taulia – the competition is fierce but growth rates for some of these firms will be very impressive over the next couple of years, we suspect.

In terms of customer demands n the P2P area, the key factors will continue t be usability, ease of customisation and integration, and cost – and they’re interlinked, of course.  Coupa’s biggest selling point – usability -  also minimises training and support costs, for instance. And there are signs of “big ERP” generally being challenged – it’s a small example, but this report of Wokingham Council in the south of England replacing Oracle with Agresso may be indicative of some challenges ahead for the market leaders.

eSourcing will continue to be a dynamic market. In the UK, we seemed to hit a tipping point last year when pretty much any organisation that hadn’t already embraced some form of solution realised  that they really should.  But this year, more large organisations will embrace optimisation / market informed sourcing, (good news for BravoSolution, CombineNet, Trade Extensions, Iasta), whilst more smaller firms will experiment with the low-cost, user-friendly auction solutions offered by firms like Market Dojo and Purchasing Auctions.

The danger is (going back to our previous piece yesterday), it won’t be procurement driving the move into more advanced solutions like market-informed sourcing, It will be the Logistics function, business units, or even the marketing department taking the lead as they see the real benefits. That is good news for solution providers who can offer some services to support the technology – non-procurement users may need some support, initially at least.

Undoubtedly, something will come along that we hadn’t expected this year – comments welcome!

And the final part of this “trends” series, on the UK public sector, will be here on Friday.

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