Do We Really Need Sourcing "Planning" Tools?

Earlier this week, I wrote briefly about Zycus' new iPlan module. In short, the module serves as a strategy and data collection bridge between its analytics and sourcing capabilities. For those who are skeptical of a need for such a capability, I can understand your concern. After all, given the millions many of us have already spent on category sourcing processes, sourcing transformation consulting, and existing Spend Management tools, do we really need another piece of software to automate sourcing category knowledge, data collection and strategy execution processes -- prior to even crafting and issuing an RFI? The answer, especially for those who've ever worked with a sourcing category specialist on the consulting side for indirect spend, is absolutely. In practice, what Zycus has showed us with this new release is a solution that, while not fully there yet, has the potential to displace category sourcing consultants and their grab-bag of savings tips.

For example, iPlan can walk a category manager through how best to profile a new commodity group, how to aggregate spend across locations, divisions and operating units, and even how to think through the total cost factors associated with sourcing specific categories. Cool stuff, but the biggest challenge with the tool at this point is that iPlan feels more like a loosely integrated process gadget than a tightly integrated sourcing strategy workbench. This, of course, will change overtime. But for now, I suspect that it will only be useful for a subset of sourcing projects. Still, it's a giant step in the right direction in bridging the spend visibility and sourcing execution gap, and I suspect that at least 20-30% of those who demo it will want to try it out in their organization to see if it can really work.

What Zycus has created -- while still rough around the edges -- is so fundamentally different than everything else I've seen when it comes to automating the sourcing strategy creation and data collection process. But perhaps most important, it's not just original; it is pragmatic and useful. For all of the other sourcing and analytics vendors reading Spend Matters, I would urge you to think about pursuing a similar concept. Ariba, especially, could create something similar -- or potentially even more advanced -- based on their own category expertise (and potentially even layer significant on-demand expertise as customers require it). Emptoris, also, should take the plunge and create something similar, as I suspect their more advanced customers would jump at the chance to try it out. But the key for Zycus -- let alone their competitors -- will be tightly integrating a planning solution like this into the rest of their suites (which no vendor has yet been able accomplish). Only then will new modules like this gain the potential for a mass audience.

Still, I can't help but grinning when thinking about the potential value. Indeed, this is something that I could see using myself if I was still working on category sourcing projects. My first reaction when I saw the mock-ups for it in 2007 was that it would have the power to reduce organizational dependence on category-based sourcing services for complicated indirect spend areas. Now that Zycus iPlan is available, I still feel it has this type of potential (though initially, I'm sure it will serve as more of a complement to third party services rather than a consulting replacement, especially around procurement transformation initiatives).

- Jason Busch

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