Have We Reached B2B 3.0 Yet? Part 4: B2B 3.0 in Sourcing

In our last post we exemplified our definition of B2B 3.0, simply defined as the first generation of technology that actually puts business users on the same footing as consumers, as the first generation of B2B technology that adds real content, community, and open-connectivity to B2B platforms through cutting edge technology like:

  • web services
  • intelligent agents
  • meta-search
  • real-time collaboration
  • semantic technology
  • mashups
  • analytics and
  • workflow

But we didn’t explicitly map these technologies to the different Supply Management technologies or workflows that you as a Supply Management professional have to use on a daily basis. Today we are going to outline some key requirements that Sourcing Suites should possess if we are going to consider them B2B 3.0 platforms. This list is not all inclusive, and simply possessing all of these capabilities will not make a suite B2B 3.0, but if these requirements are missing, then the suite will not make the cut. In mathematical terms, these are necessary, but not sufficient, conditions.

In order to avoid confusion, for the purposes of this post, and this series, we are using Sourcing Innovation’s typical definition of a Sourcing platform from a technology perspective, which is defined as the platform that is used from the time a need is identified until a contract is signed. It is the platform that underlies the “planning” and “sourcing” phases of the strategic sourcing execution lifecycle (with Procurement, SRM, and similar technologies taking over during the “execution” phase).

From a historical perspective, the primary “modules” that such a platform would include RFX, e-Auction, optimization, analysis, and contract creation and management, but these would be integrated in one seamless process because, as SI has repeatedly said, it’s not a suite, it’s just sourcing.

From this viewpoint, some key capabilities that such a suite must possess include:

  • near real-time market intelligence
    integration with market (price) indexes, including commodity exchanges, public sector price databases (from public contracts), best price databases (that compare listed prices across multiple sets), energy rates, and labour rate databases (from government and published data)
  • automatic cost-model recalculation
    and alerts whenever there is a potential for costs to increase or decrease beyond a certain threshold
  • single-sign-on supplier portals
    where the supplier can manage all interaction with you as the buyer and submit invoices, query payment status, resolve conflicts, collaborate on NPD, discover upcoming opportunities,and provide new product and service information
  • automatic profile completion
    for current and new suppliers that uses IRS, credit and risk services, business directory, and other public sources to auto-fill missing data in a supplier’s profile, so all they have to do is confirm and correct data; also, automatic discovery of products and services they offer from online exchanges that they list on
  • visual supply chains for each supplier
    that allows a buyer to visualize the supply chain for each and all products sourced from the supplier based on all available data as well as the global supply chains the supplier interacts in based upon public trading data from government import/export databases and public sector contracts
  • auto-quote
    based upon current pricing, standard increases or decreases based upon market rates, and publicly available price data to simply initial supplier bids in an RFX or e-Auction
  • (near-)real-time decision optimization
    that is able to compute the lowest cost award taking all cost (model)s, (business) constraints, and goals into account
  • advanced spend analytics
    that can not only allow a power-user to slice, dice, enrich, re-categorize, and slice again the data any way they want to see it, but detect anomalies, project trends, and dig up insights that will allow new opportunities to be sourced in clever and valuable ways
  • contract obligation tracking and auto-verification
    most contracts require submission of insurance certificate, government (tax) forms, certifications, audits, and similar data upon award that needs to be tracked and validated by the buyer – this is a very time-consuming task; the platform should allow buyers to upload and use semantic technology, government, insurance agency, and other APIs to automatically validate uploaded documents upon receipt so that all a buyer has to worry about is chasing down delinquent suppliers or suppliers who don’t upload documents in the require formats (to allow for automatic verification and validity tracking)

In other words, the requirements for a modern B2B 3.0 Sourcing platform, even from these short lists, are well beyond what has traditionally passed for an e-Sourcing platform that, in the early days, was anything that could manage a few RFX forms, power a simple e-Auction on a few lots, and index a scanned version of a contract on a few meta-data fields. Do any platforms out there make the cut? We’ll get to that, but first, in our next post, we’ll define some of the key capabilities of a B2B 3.0 Procurement platform.