The Market Speaks: Procurement practitioner requirements and the tech vendor response — Tradeshift
Spend Matters constantly updates its understanding of the state of the procurement tech market via RFIs for our SolutionMap dataset, vendor interviews, global event attendance and product demos with the aim of keeping tech-selection decision makers ahead of market trends. But we also endeavor to grow our understanding of the wants and needs of the customers using that tech – the practitioners.
In one series of interviews this summer and through to the end of the year, we are talking to vendors about what their customers really want from them and how they are proposing to address those needs. In a second one, we are talking to the end users about their expectations and requirements.
To kick off the first in the vendor series, we spoke with James Stirk, Chief Revenue Officer at business commerce platform Tradeshift.
Businesses are inevitably looking at ways to reduce costs, but that’s rarely the primary motivator we’ve seen for change, even in the current economic climate. Reducing headcount is a one-time benefit; the organizations we’re talking to have their eyes set on a bigger prize.
What are the challenges and asks of your customers?
The pandemic amplified the need for more analysis and greater insights based on a complete understanding of every relationship across the wider supply chain. Finance and procurement professionals are being asked to up their game, to do more with less. So we are seeing businesses take a much more holistic view of how they can deploy automation to balance that equation and deliver better outcomes from sourcing through to payment.
Time to value is incredibly important. Our industry has a poor track record for supplier onboarding, and prospects are actively looking to understand how a network approach like ours will quickly get them from 0 to 100.
The other big focus is on ease of use. Gone are the days when procurement teams saw complexity as a badge of honor. Businesses recognize the need to offer solutions that practitioners actually want to use. That means aligning the overall experience to the demands of a generation that has grown up being able to access anything they want at the click of a button.
Are you witnessing a shift in demand towards more ESG and supply chain risk capabilities?
If you look back five to ten years, ESG policies were often focused on being seen to do the right thing from a brand perspective. The commercial imperative was undoubtedly there, but there was a looser and less tangible association between the two. There was also a fair share of greenwashing.
The most significant change we are seeing is that ESG is no longer an ‘opt-in’ for businesses looking to do the right thing; it’s a strategic imperative that no company can ignore. A number of things have got us to this point.
The pandemic had a massive influence on how businesses view the importance of ESG. It’s increasingly accepted that companies with solid ESG credentials fared better during the pandemic than those that didn’t. In other words, resilience and ESG are two sides of the same coin, sharing many of the same characteristics when it comes to the makeup of supply chains.
Consumers have also become much savvier in evaluating the ESG credentials of businesses they interact with. Companies simply can’t make claims they can’t then back up with solid data.
Banks and financial institutions are rolling out programs that reward more ESG-driven businesses (presumably because they see these companies as lower risk) and are creating barriers to access capital for businesses that fail to show evidence of responsible sourcing practices. This new level of accountability requires firms to show data-backed, tangible evidence to support their claims.
Let’s suppose all of this isn’t motivation enough for businesses to put ESG at the center of their business strategy. In that case, a raft of new regulations, including the Lieferkettengesetz in Germany, will increasingly compel companies to provide information about the carbon footprints, biodiversity impacts and working conditions of their suppliers.
What is Tradeshift doing to address these customer challenges?
We are helping businesses to connect digitally with 100% of their supply chain partners. Once businesses have that foundation in place, then our open platform means they can start to do some really interesting things to reveal more about the makeup of the supply chain.
We’ve been working with partners like Normative to prove how data from our network can be used to help organizations access a full picture of Scope 3 emissions across the supply chain. We’ve also been exploring areas such as digitally-enabled green financing that rewards suppliers that commit to high ethical standards with more favorable payment terms and working capital arrangements.
We’ve also seen some incredible innovations in the ESG space through our B2B marketplace platform that connects large buyers to pre-vetted suppliers. One example of this is Dooka, a B2B marketplace that’s designed specifically to connect large African businesses with smaller local suppliers. Most companies set out to do the right thing. The beauty of the marketplace model is that it makes doing the right thing easier.
Many thanks to Tradeshift, and we’ll be talking to more vendors next week – check back in then.
To help you with your tech selection challenges, Spend Matters offers vendor analyses as part of its Insider membership, providing independent and in depth tech selection tips across all procurement categories.