A TRULY Open Supplier Discovery Network: Spend Matters Crowdsource #1

supplier management BillionPhotos.com/Adobe Stock

As I hinted at yesterday, the notion of a truly open supplier network doesn’t exist today. My first contribution – and request of you – has to deal with the best ways of overcoming the notion of closed supplier search, ratings, rankings and connectivity.

Instead of pointing fingers at the effect of closed systems (e.g., supplier network fees for transactions, business credit rating agencies “double-dipping” on fees, etc.), let’s together come up with solutions. Together.

This is the first installment of a crowdsourcing series where Spend Matters analysts will offer up an “open call” to the market for a B2B problem that exists in the value chain. It’s easy to complain generically about broad problems, but we thought we’d provide a more granular specification for a crowdsourced solution that we feel is needed in the market. There’s no cash prizes here other than bragging rights…and world domination (maybe).

We will publish the stories of any providers (or even just creative ideas that our readers – aka you – have on the topic) that can demonstrate a promising approach to the problem. And if you have a great idea that you’d like to argue for, we’re willing to host a guest post from you.

Here’s mine (hinted at in a post on the topic yesterday: The problem with supplier networks and a modest proposal: will blockchain kill closed networks and D&B?

Wouldn’t it be great for a supplier (and buyer) if a supplier could publish information about itself in a peer-to-peer blockchain-type distributed and discoverable registry?

As I noted earlier, in this world, “Each supplier would have its own unique and non-proprietary ‘license plate’ company identifier (i.e., an open source version of DUNS) that would be the ‘key’ to the supplier information that the supplier maintains, but also that is extended to third parties who provide additional services on the open network.”

In other words, there is not a patchwork of closed proprietary networks (that may have free connectivity options, but only operate within their networks), but rather, a set of inter-connected registries and services from various providers. It changes the game from who “owns” the supplier by hoarding supplier data and replicating that data to serve a captive provider (e.g., cloud apps provider) to more of a game of who can augment the basic supplier data in the distributed repository (and associated registries). See here if you want to dive into a particular implementation approach/’standard’ via ebXML.

OK, here are some details and related musings on this idea:

  • All companies can set up shop by querying the blockchain to make sure their identifier is unique, and if so, they can write their company information to the blockchain. If they need to add vertical-specific or community-specific extensions or translations (e.g., a solution providers’ requirements to synch with its supplier master data systems/files), then there should be a form of ‘map factory’ used by providers with iPaaS functionality to support such translations. Basically, think of this as a virtual supplier master written to the blockchain that buyers/partners/regulators subscribe to and augment (via their own services). The core of the data is public and made discoverable to generic search engines and also to specialized providers who augment and extend the data and related services.
  • Just as a supplier master record in a buyer’s system can be extended and enhanced with more data fields (and associated metadata) for the benefit of that buyer, a virtual supplier master implemented via a blockchain-like approach should also be extensible, and offers the benefit to suppliers of being able to write/publish once and then have downstream buyers/users subscribe to such updates. In other words, master data updates to this core/extended virtual system-of-record (from a supplier discovery standpoint, not a G/L standpoint) are just like other transactions on a blockchain.
  • This is a complex data-centric story – not a story of executing well-bounded transaction processing. And since so many processes and transactions fail because of the bad master data feeding them (e.g., AP is a good example), and because, in turn, so many of these master data problems are due to data synch errors stemming from master data replication across companies, why not attack the data problem systematically?

The big thing is:

Should the basis of B2B e-commerce solution competition really be about monetizing proprietary numbering conventions like DUNS, category schemas like NIGP, or broader proprietary networks?

I don’t think so, but it’s hard to change the status quo, and it requires new ways of thinking. For example, Alacra (owned by Opus Capital – who also owns Hiperos) is a proverbial ‘Rosetta Stone’ of data services if you’re looking to de-duplicate and harmonize your supplier master data, but could be serving up its capabilities in new ways as an embedded platform rather than just serving its sister company. This is has been my issue with the SIM vendors who try to be MDM-centric providers and supplier management process automation providers (which is why I like Lavante’s big push towards just doing the data management aspect).

The Future

Over time, you can see how this idea can be extended beyond supplier discovery and supplier data management (i.e., allowing for a golden record of supplier information that is lifted out of single buyer-supplier pairs and made available to the web), but rather, a broader set of business services. This was the intent of UDDI 15 years ago (which ebXML has only somewhat picked up that mantle) in terms of discovering various web services. Web services in an XaaS economy is important for buyers and sellers alike to not only find each other, but to assess each other, transaction with each other, and collaborate for mutual gain.

For example, I can easily envision a set of supplier certification services that are established in concert with regulatory bodies, NGOs, and a network of authorized auditors. So, an auditor can certify a supplier, digitally sign/notarize the audit results, and write them to the blockchain as part of that supplier’s extended supplier master record. Suppliers allow their prospects and customers to see the available data services (which can read-only data access to humans – or can be programmatic access to APIs which securely serve up such data) and then access them on the blockchain.

Simply put, this is a blockchain-type architecture applied to supplier networks — and supplier discovery — in new ways.

Back to Reality…

Does this sound like a pipe dream? Maybe. But, I don’t think it’s too far out. For example, think about the concept of an app store with complementary apps that bolt on to certain app providers’ cloud systems. My idea is basically letting suppliers create their own app stores, but it’s not just apps that are discoverable, but simply, data about the suppliers themselves.

But, what about the standards that will be needed? What’s in it for the mega app vendors who don’t want to give up control and who use their buyer customers to create their own closed ecosystems? And how about the new big B2C e-commerce mega-players emerging into B2B? How will bureaucratic regulators and standards bodies play in this? Where is blockchain development relative to supporting these needs? How will supplier registry sites do this given that it could radically disrupt them? What about supply chain networks? How about content aggregators that make a business of selling replicated digital content as a service?

These are difficult questions, but they’re strategic, because right now, there are lots of startups nibbling at the edges here (contact me if you want to know who), and more importantly, there are some things that many legacy players could do here to disrupt themselves in a favorable way. For example, IBM has a very weak and fragmented story for open supplier networks — but such an open network backbone could be hugely strategic as a backplane of a rich set of unified services that it could offer.

What about OpenText and a way to similarly hang all its fragmented network services off of? Is there a D&B killer out there that could do this (e.g., Rapid Ratings)? Might Bloomberg or Thomson Reuters or others be early movers? Might Amazon find a way to use this to provide a native “Froogle” (i.e., Google shopping) capability to own the user experience at the time of search rather than just being another marketplace destination site? Could Salesforce use this to create a business network and finally make a coherent link to the buy side? Might SAP use this as a way to bridge a gap between its e-marketplace-centric Ariba Business Network and a set of HANA platform services?

I could list 20-30 providers here and why it’s critical for them. But let’s wrap up this way-too-long blog post!

What do you think? Do you think a truly open supplier network approach like this could work? How do you think it might evolve? Most importantly, are you working on any piece of this? If so, please feel free to reach out to us and let us know (either confidentially under NDA — or if you have something that will help change the game). We will feature anyone who can make some significant progress in this area.

Drop me a line [pierre (at) spendmatters (dot) com] or post a comment — or call us! We’ll make sure your voice is heard (if you want it to be). And if you’re already working on a solution to the problem, let us play mental judo with you and help solve it together, quietly or not-so-quietly depending on your goals.

Stay tuned for more crowdsourcing requests from us in the coming weeks and months!

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Voices (2)

  1. Mohamed Khalife:

    Hi Pierre, nice article! I am interested in the “lots of startups nibbling at the edges”. Could you contact me at the email address I left? My company is interested in moving into Supplier Discovery/Enablement with the goal of making it as open as possible.

  2. Tratham Kovaloff:

    Hi Pierre, Great article. Have you heard of anything lately that is looking into this?

    At my company we are working on connecting suppliers to procurement by combining supplier intelligence, knowledge management and machine learning. But the blockchain idea is great. The biggest issue we see is procurement finding the right supplier at the right time. We have an open supplier marketplace. Any kind of solution with blockchain would still need to solve this problem.

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