Jason Busch on eSourcing Past, Present and Future at Scanmarket Event

Last autumn, I spoke at a Scanmarket customer conference and last week I went along to this year's event to hear Jason Busch (Spend Matters US founder) doing the same at the Park Plaza, Westminster. Scanmarket is a privately owned firm, Danish by origin, but with a decent international presence these days. The main product is a very strong eSourcing platform, and the firm has recently started partnering with Basware, who provide the P2P element of a wider end-to-end suite if that is required by clients.

For his keynote, Jason took the Dickens "Christmas Carol” ghost theme as the basis for his session. A little early in the year perhaps? I suggested he explained that by saying Chicago was on a different time zone to London – 3 months ahead.  But the “Ghost of eSourcing Past / Present / Future” was a nice hook on which to hang his comments.

His “past” included a list of all the “eSourcing” firms that are no longer with us – and it is a pretty long list! He suggested that many went under because they did not focus enough on adoption, and the technology was basically fine functionally but just not designed with the user in mind. So often tools were bought, but then just not used in the business.

His eSourcing “present” sees an eSourcing market which is still surprisingly fragmented, without any dominant software provider. That brings a lot of choice for customers but also confusion. Consultants are not as close to this sector as they are to the P2P software market, and many customer organisations use multiple eSourcing platforms within their organisation, either for good reasons or purely through history.

Jason identified a couple of key trends. Supplier management issues and capability are becoming more important, and he sees these factors coming together with eSourcing. Ease of use is still key in driving solution selection decisions, while suite considerations are coming into play more often, even though most eSourcing software decisions are still made in isolation.

Much of the innovation, he says, is coming from around the “fringes” of the eSourcing market, in areas such as direct materials or demand aggregation. And while savings is still of course a major driver, “value is starting to rule”. So asset and working capital optimisation, risk management and revenue growth are coming into play more as procurement objectives and therefore are factors that need to be  incorporated into eSourcing tools and processes too.

That led on into his “future” vision. Value will come from those “new” areas but that will mean more and more data to be considered. The future is in “sourcing in three dimensions”, he believes - that is, physical goods and services, information (including aspects such as “provenance”) and the financial supply chain.

Information becomes central to effective risk management of the supply chain, and the sourcing process will be part of information gathering and will set the scene for ongoing management.  That is not only around supplier compliance and the regulatory environment but also issues such as supplier performance management, development and innovation.

Then we have the financial supply chain, a huge topic in its own right, including trade and supply chain finance, dynamic discounting and more. How can big buyers use their own strength and credit rating to help suppliers? Again, this will start to be explored from the early stages of the sourcing process onwards.

Finally, Jason touched on cognitive solutions as part of the future, solutions which will feed on all this data that is going to be swirling around. But that won’t be just looking backwards for analysis; “gaining a predictive edge on the market would be a huge benefit”, he said. That might take us into yet another whole new world … one that not even Dickens predicted!

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