Platforms and Networks: Procurement Tech Summit Session Explains the Difference

Andrew Karpie

What are the questions that keep you awake at night? The meaning of life? Carpet or tiles for the bathroom floor? The plot for your first novel? Or maybe if you're a real procurement professional, perhaps even of the geek tendency, it might be this - just what exactly is a "platform" and how does it differ from a "network"?

These have become much used, perhaps even over-used words, in our world. It seems that every new solution provider has either developed a platform or perhaps is looking to run their 'App' on others' platforms. Or maybe they mean networks ... or both?

So, as I count myself firmly in the confused camp, I was pleased to see that Andrew Karpie from Spend Matters US along with Bob Solomon, CEO, Software Platform Consulting Inc., were running a session at last week's Procurement Tech Summit where they would explain all.

Andrew explained that the first business use of "platform" was in the context of automotive firms who started building different models on the same basic "platform". It was then used in various contexts in the broader IT world, until we arrive at today, and the definition - "a cloud ecosystem that connects multiple groups with an open API architecture".

OK, that may not be quite straightforward enough to turn on the light bulbs, it certainly didn't totally do it for me. But it got clearer when our speakers went through the defining characteristics of a platform:

- New assets are created through interaction and participant creativity

- An ecosystem of business "complementors" that increases value to all participants

- A stable core architecture with openness that encourages ecosystem formation and the network effect

There were a couple more, but that's enough to start getting a clearer picture of what we mean. Think about Uber for instance, AirBnB, or indeed Amazon. They all fit that description.

In the supply chain context, platforms are a superset of networks - so not all networks are platforms, but all platforms have some network characteristics. Think of a platform as a "layer of technology and a business model to allow third parties to add value".

Our heroes then talked about some solution providers in our world. Of the younger firms, Tradeshift certainly have the platform architecture although "it is not clear yet how much traction they've got". Amazon is a platform although as they get deeper into Amazon Business it remains to be seen whether that will be as open as the retail platform.

Coupa is "more open than Ariba" and is "somewhat of a platform" according to Solomon. Ariba has not had an open API historically, although coincidentally, almost as this session was going on, Ariba announced at their event that things are changing. We need to look into that further but the press release says this:

“… SAP Ariba is launching an open partner ecosystem to empower its partners to enhance SAP Ariba cloud solutions using standard based APIs. Partners on the open ecosystem will be able to quickly deliver innovative services to customers around the world using the cloud platform of their choice or the SAP Ariba platform”.

We then move into Karpie's area of deep expertise - Work Intermediation Platforms. These allow buyers and sellers of "work" to engage with each other. That work might be traditional contingent labour temporary assignments, or a few hours of IT development work, or walking your dog, or designing a new brochure. But generally the characteristics are as described above although I'm not clear that every WIP is really an open platform.

Anyway, my own mind felt much clearer after the session; we will no doubt be covering WIPs and other platforms in the future, and if you are interested in WIPs then do look out for Karpie's articles on the Spend Matters US website and or PRO subscription service - he really does know more about this sector than anyone I've ever met!

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