Daily Archives: October 19, 2007

The 2nd Sourcing Innovation Series ReCap, Part I

Even though a few bloggers have disappeared into the woodwork, I think it’s time to start wrap up the sourcing innovation 2007 series. First of all, I’d like to thank all of this years contributors to date and summarize the posts in an easy reference table. Then I’m going to recap each one before recapping the series.

The Future of eSourcing – Less is More Alan Buxton
The Future of Sourcing: Results-Based Process Specialization Charles Dominick
Sourcing Innovation Series David Bush
The Future of Spend Analysis Eric Strovink
Sourcing Innovation Series: Wither Procurement as Strategist in 2008? Jason Busch
Future Purchasing: The Extended-Enterprise Connector Jean-Philippe Massin
Yes Virginia! There is more to e-procurement than software! (Part 1) Jon Hansen
Yes Virginia! There is more to e-procurement than software! (Part 2) Jon Hansen
The FOSS(ilization) of the supply chain: The risks of a strategy centered on Free Open Source Software Jon Hansen
What’s Next in Purchasing? Ask Your Supply Management System Tim Minahan
Trading on the Spot Market the doctor
Let’s Get Analytical! the doctor

Alan Buxton tells us that in the future, e-Sourcing tools will be fun and helpful, taking cues from consumer-friendly sites like ecourier.co.uk and zopa.com that clearly demonstrate where the value is. Alan indicates that this is crucial if a mass adoption of e-Sourcing tools is to happen globally.

Charles Dominick said that the future of sourcing is continued adoption of the concept of supply chain management, but with smarter implementation, based on the goal of having the organization operate like a well-oiled machine, where workers are not jacks-of-all-trades and master of none. It will see appropriately assembled supply-chain management teams that have specialists for those areas requiring specialist-level expertise, like strategic sourcing, negotiation, and supplier management. An understanding of how functions within the supply chain interrelate will continue to increase in importance, but some of the often ignored purchasing skills will resurface as practitioners remember why strategic purchasing has become an elevated profession and how it significantly contributes to organizational effectiveness and profitability when done right. And the role of purchasing manager will be even more important – as this individual will be required to be a master of facilitation to keep the team running like a well-oiled machine, in addition to being well versed in all elements of the supply chain and master of a few.

David Bush, the most practical of all of us high falutin’ bloggers, proclaimed that even he sees that advanced sourcing optimization will be the catalyst which merges the function of general business analyst with the sourcing team. This is because taking a complex bid, and automating more of the lifecycle, is critical to compressing the amount of time needed, and thus, allowing more bids to be strategically sourced by the same number of people and, with integrated decision optimization, sourcing professionals can derive very detailed scenarios in a matter of hours, instead of weeks. He sees the next year or so as being a continued transformation of procurement to self sufficiency, which removes layers of inefficiency.

Eric Strovink made four prognostications for spend analysis in 2008:

  • The distinction between data-warehouse-based spend repository tools and traditional business-intelligence tools will continue to erode.
  • The distinction between true spend analysis tools and spend data warehouses will widen, in part because it is impossible to perform true ad-hoc analysis with a fixed-schema data warehouse.
  • The awkwardness and limitations of OLAP technology for spend analysis will become increasingly apparent as more general purpose data sets are considered by professional spend analysts.
  • Invoice-analysis and commodity-specific analysis will dominate the “what’s new” frontier for spend analysis during 2008.

Jason Busch pointed out that procurement will be far less influential in the year(s) ahead in a number of areas when it comes to determining corporate strategy, and pointed out procurement outsourcing, dashboarding, and risk management as three prime examples. This is because tangential stakeholders are about to take a larger role in procurement innovation. With respect to procurement outsourcing, you’ll see a lot more CFOs making the final decisions. Finance will also figure more prominently in dashboard selection and visibility. And the executive team as a whole will start to get a lot more interested in risk management.

We’ll review the rest of the posts, as well as the series as a whole, in Part II. Stay tuned!