Innovation in procurement technology – it’s not that bad, Jason

We commented here on Tuesday about the Jason Busch post on the lack of innovation in the procurement technology market. To quote Jason -

When SAP is the most innovative company in the procurement and operations technology sector, I find it representative of a broader and much more serious problem. Start-ups and established best of breed vendors alike have all but abandoned true innovation in this sector.

Well, I’ve had time to reflect, and here are my thoughts.

1. I’m still getting excited...  Although I’ve been around procurement for even longer than Jason (he’s young...) I’ve only really started getting into technology in the last year or so as a writer / analyst rather than just a simple practitioner. So to me, there’s still a lot that seems pretty new and interesting. Optimisation / advanced sourcing for instance;  (CombineNet, Trade Extensions, Bravo et al); or the approaches to managing supplier information and risk (Achilles, Emptoris/Xcitec etc), or Sievo and their performance management approach.  I understand why Jason may feel he’s seen it all before, but to someone less steeped in it – still looks pretty good to me!

2. At least it all works....  OK, there may not be a new leading edge whizz bang product every two minutes, but procurement software these days works. Going back to my early experience with exciting new products – when they really were new – there was one big flaw. They didn’t work! Not true in all cases of course, but for those of us who went through the very early days of marketplaces, auctions, even ERP, it’s great now that pretty much everything on the market will do what it claims to do, and might even be reasonably user friendly (not in all cases).

3. A strong market...  many, many organisations don’t take advantage of all the technology currently available to them. Big firms that still don’t use any sourcing tools, have never heard of optimisation, don't use risk management tools. But we seem to be at a tipping point where adoption is taking off – so providers across procurement technology are doing well at the moment. Ironically perhaps, this may be making them less bothered about innovation; if their current business is driving ahead nicely, why get distracted by focusing on new products? (So this argument doesn’t disagree with Jason but may explain some of what he perceives).

4. Everything matures...  we don’t expect huge innovation in – for instance – word processing tools, or even in the software that powers on-line banking . Beyond a certain point in the life-cycle, the customer knows pretty well what they want, and the space left for real innovation shrinks. Perhaps we’re just getting to that point of maturity with procurement technology? Perhaps we don’t need more innovation, we do just want steady incremental improvement?

Of course (he said, arguing with himself), real innovation is often meeting a want or need the customer didn’t even know they had! And I certainly haven’t seen much evidence of that sort of thinking in our field recently.

So.. I partly disagree with Jason, in that I still see some interesting new products and features emerging, and indeed new ways of packaging capability to make it easier or more integrated for users. And even if he is right that we’re not exactly in a golden age for procurement technology innovation, then maybe that is to some extent an inevitable consequence of the greater success and maturity of our professional field.

But I look forward to talking to him about his idea of the Spend Matters Innovation Awards.  I see a huge dinner at the Grosvenor House, a top comedian presenting the prizes...  (only joking, Supply Management / Procurement Leaders)!

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