Procurement Technology future landscape part 3 – Supplier networks

Jason Busch (Spend Matters US) has published the third in his series looking at procurement-related technology futures and predictions. Having considered sourcing and P2P developments, this time it is supplier networks and buyer/seller connectivity.

He starts with a bit of a dig at SAP and Oracle and how they have "under-served their own customer base", and at Ariba for "building a network business off the backs of the very largest (top 5%) of suppliers in its market, who are subsidizing all of the smaller suppliers in a twisted version of Obamanomics applied to what Spend Matters believes is largely a commodity connectivity service".

We then have his views on emerging price competition with new entrants such as Tradeshift putting presure on the whole network fees model. But the most interesting thoughts are around "the rise and interest of supplier network models that do more than merely push virtual paper back and forth".  And Jason's final paragraph paints a picture of a much more intergrated set of tools that goes well beyond current network models:

So in short, in 2013, the network of the future will begin to take shape.. Take a connectivity service like the Ariba Supplier Network and put it at the core. Strip out value-based transaction fees for commodity document exchange (and potentially make basic connectivity free). Add fees back in where value is actually created (e.g., financing) by taking a reasonable cut. Combine supplier discovery services that go beyond publishing an RFX to providing detailed insights on part of search capabilities that combine and aggregate third party information sources. Then toss in basic supplier enablement and supplier management and registration tools for suppliers to manage profile, financial, certification, credential and other data in a many-to-many matter.

Visionary stuff - read the whole piece here.

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