Enterprise Irregulars Content

Cloud e-procurement is procurement. It’s time to declare CD versions of e-procurement software — and in most cases, broader procure-to-pay (P2P) solutions, inclusive of e-invoicing — dead. Cloud e-procurement has not only become the de facto standard for even large companies going into new software selection processes. It is also now the perceived migration path for the majority of those organizations that we have spoken to recently that have previously deployed and installed software solutions such as Ariba Buyer, SAP SRM, Oracle eBusiness Suite or PeopleSoft SRM.

I’ve given entire talks on how procurement organizations are turning to new types of technologies and initiatives to become more predictive and proactive in their overall efforts. Yet this argument also forms the basis of the final stage, or Level 4, in the spend and supply visibility maturity curve that I presented on the Spend HQ webinar, The Spend Visibility Curve: Where Do You Stand.

It’s fairly easy to discern overall procurement maturity within a particular organization based on spend and supply visibility maturity. To this end, I recently started to explore some arguments about spend visibility, based on a Spend HQ webinar that I co-presented, The Spend Visibility Curve: Where Do You Stand. Today, I continue this series on Spend Matters with a discussion of what I have termed the continuous improvement stage (Level 3). If you guessed this stage was inspired by lean manufacturing principles, you would be spot on.

What you don’t know about your suppliers, your supplier’s practices and your overall supply chain is bound to catch up with you – even if you choose to ignore it. A recent study illustrates why such diligence matters. Many fast food and fast casual restaurant chains have made pledges in recent years to end antibiotic use in meat and chicken. Yet according to the study, most of the meat used by these chains comes from animals that are “routinely fed antibiotics.”

I’ve had a number of discussions with folks on all sides of the procurement and accounts payable technology market of late, covering different points of view on where supplier networks and transactional connectivity might be headed. One area that seems to come up often is looking at networks not just as a tool for operational efficiency, as they are today, but as an essential compliance utility.

While we tend to segment, profile and analyze procurement solution areas more frequently, the market for procurement market intelligence – including data, content and platforms – is evolving just as rapidly. However, we find that most procurement organizations generally know much less about their options in this area than technology. In the coming months on Spend Matters PRO, we’ll attempt to segment and analyze the market for procurement market intelligence providers in more detail.

As further evidence that global companies must have truly global standards for supply chain and supply responsibility practices, Nestle recently announced it will adopt a global sourcing standard for the cocoa in a key global product: the crispy, mildly chocolaty KitKat bar. This announcement has some significance, as the Consumerist blog reported, because the chocolate industry has faced allegations of using child labor. It also would make KitKat the first global chocolate brand to use only sustainably sourced cocoa.

In a recent Industry Week column, Paul Ericksen, a consultant, makes a number of arguments about the importance of considering the extended supply chain when setting up new facilities or onboarding new suppliers. Chasing tax incentives for new facilities or swapping out suppliers/facilities is a bit like chasing low cost labor. It’s a near-term arbitrage that can actually increase overall risk, as well as potential direct, everyday costs of logistics costs increase.

The notion of having suppliers pay in part or in full for what is essentially a benefit of the buying organization is as much a philosophical as pragmatic one. It’s actually an outstanding debate to have within an organization, as the discussion can bring to the surface a range of topics that can help procurement to better shape its budgeting, governance and even its charter.

Building on my earlier post introducing supplier networks and platform-as-a-service (PaaS), which was inspired by some of the thinking in Accenture’s paper, Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One, when considering supplier networks of tomorrow, I can think of dozens of future network-based applications that will supplement, augment or replace existing procurement and supplier tech applications.

Here are 6 ideas for what’s possible with future PaaS-driven network applications.

I’m glad Accenture put supplier networks at the core of its future vision for technology in its recent white paper: Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One. But the supplier networks of tomorrow will look very different than those that are most common today. Tradeshift, which is pitching a future network vision at the core, is perhaps the first active participant in this space today to leverage some of the early thinking and network capability in practice with platform-as-a-service (PaaS) approach.

PaaS is critical to understand how we’ll build and deploy connectivity hubs between buyers and suppliers at all tiers of the supply chain, as well as applications that support communication. But what is PaaS in the context of a network? As I’ve noted previously, future business networks will be supported by cloud computing models that include PaaS, an approach which will become increasingly productized and prevalent starting this year.

What will the future of category management look like? Accenture has a strong opinion on the topic, and shares it in their recently published brief, Procurement’s Next Frontier – The Future Will Give Rise to an Organization of One, when introducing the concept of the “virtual category room.”

The notion of extending category management into a digital age is a complex one, especially considering many organizations are still barely crawling in building out category management teams outside of only a few top areas of spend. Yet the technology to support a new type of category management thinking and capability is not that far away. In fact, much of it is already here – it just needs piecing together.