The Latest in eSourcing Tools and Technology – Our Hot Topic for January

Our hot topic for January is "eSourcing – the latest tools and technology". When we announced this , we got one remark along the lines of “well, that’s not exactly ground breaking, is it”?

Now that’s a fair comment - eSourcing is not a new and exciting concept, given that the first electronic auctions were being run back in the last Millennium. However, there are a couple of arguments to explain why we think it is still worth focusing on this topic and why it should be of interest.

Firstly, it is easy for organisations who have been using eSourcing for many years to think that “everybody does it”. They don’t. There are many organisations who have not invested and implemented the necessary technology, and are still thoroughly paper based. Now many of those are small organisations – but not all. And even where larger organisations have invested, our experience suggest many are not utilising fully what they in theory have in place. I recall having a coffee a couple of years ago with a senior manager from one of the UK’s largest and most respected companies.

“What eSourcing have you got in place”? I asked.

“We bought the full Ariba suite a few years back” she replied. “We’ve done a couple of auctions”.

“So a couple of auctions – but you run other sourcing exercises’? I innocently asked.

“No, we’ve done a couple of auctions. That’s it”!

Now that is not a criticism of Ariba in any sense. She blamed their own internal issues for the lack of use of the software. But that firm is not alone – there is a huge amount of shelfware sitting around organisations, where licences have been purchased but software just isn’t fully used. So that raises some interesting questions about why eSourcing is still nowhere near 100% uptake and usage.

Secondly, like pretty much any element of the software industry, eSourcing is changing. There are a number of strong trends which we will come back to over the month. Perhaps the most interesting is a divergence in two different directions. On the one hand, we have market informed sourcing / optimisation / advanced sourcing from providers such as BravoSolution, Trade Extensions and CombineNet getting more penetration. These products look to address THE most complex sourcing challenges you can imagine, and there are some genuinely exciting and transformational stories there.

But at the other extreme, we see new providers such as Source Dogg and Keelvar, and more established players like Coupa, emphasising simplicity - how easy it is to use their products, with a user interface designed to be idiot proof. Yes, you can even let your stakeholders run their own sourcing exercise! (Sorry, couldn’t resist. Of course stakeholders aren’t idiots. Well, not all of them anyway).

So we will come back and look at those two trends in more detail as well this month. That also leads into another big question. Form a technology point of view, are “suite” type products that link up “source to pay” (and more) going to win, or will “best of breed” solutions always have something more to offer? That’s another interesting issue, as more providers look to link up the sourcing element of their solutions with contract management, analytics and other elements.

Plenty to look at there we think, and despite the fact that eSourcing has been around a while, we would argue that in the greater scheme of things, it is still relatively in its infancy. There is a lot further to go, and in ten years time the technology and how we execute sourcing might look very different to today.

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