Comparing and Contrasting US and UK/European Procurement Product Innovation

One thing I’ve been struck by over the years is the different types of vendor and product innovation coming out of the US and European markets. As a general rule, I’ve found European vendors and solutions providers to have a greater focus on delivering specialized solutions that either extend or enhance existing product areas. This would include, for example, the many UK and European spend analysis providers that offer essentially the same services as their Western counterparts, but often with a slightly unique twist (e.g., focus on public sector needs, VAT expertise/reporting, etc.). And it also includes folks who do something that I think even technology geeks including myself consider boring, but incredibly important -- making things like electronic invoicing, catalog management and catalog master data work in SAP SRM environments.

Granted, there are the occasional breakthrough innovative vendors coming out of Europe that are defining new markets like Sievo, but in general, I see many European providers focused on incremental improvement or specialization in key sectors. US providers, in contrast, are all over the map, yet most of the true innovation in entirely new areas is coming from this side of the Atlantic. Granted, among start-ups, you still have the classic “let’s improve a current enabling capability” model like Coupa, Spend Radar, etc. But you really do have a critical mass of numerous breakthrough providers in the states like Co-Exprise for direct materials sourcing management, Pollenware for creating competitive payables discounting markets, Panjiva for supply risk and global trade content and intelligence, Simplifying IT for enhancing and re-skinning SAP SRM (making the UI almost sexy), etc.

Yet there's a big problem with this situation. To wit, nearly all of the more innovative, small companies in the US competing in this sector don't have their act together in Europe and are completely aloof to what it takes to succeed there. For example, few understand the nuances of what it means to get past the UK, and truly pursue the German and French markets (which are entirely unique in their own right), let alone the Nordics or Mediterranean countries.

For this reason, European procurement organizations that truly believe in embracing early-stage innovation should direct some of their efforts to investigating what breakthrough US providers have to offer rather than waiting to be approached by the companies themselves. Because usually what Yanks end up exporting over to Europe for private sector procurement consumption ends up being proven, established technology platforms (e.g., Ariba, Emptoris, BravoSolution) that compete in existing Spend Management markets rather than the providers that are creating and defining entirely new sectors and classes of product which are not directly comparable to anything else.

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