Daily Archives: March 17, 2016

Have We Reached B2B 3.0 Yet? Part 7: Category Management Excellence

In the series so far we have:

  • defined the basics of B2B 1.0 in Part 1
  • defined the basics of B2B 2.0 in Part 2
  • defined the basics of B2B 3.0 in Part 3
  • defined the (basic) requirements for a B2B 3.0 Sourcing platform in Part 4
  • defined the (basic) requirements for a B2B 3.0 Procurement platform in Part 5
  • defined the (basic) requirements for a category management application in Part 6

in an attempt to determine whether or not we have reached B2B 3.0 yet. To that point, we haven’t reached a conclusion yet, stating that we needed to figure out just where we were in relation to where we should be and what B2B 3.0 really is. Plus, we’re still not ready to address this question because B2B 3.0 has to enable category management excellence, and this goes beyond just building the basic technical capability to support category management that was defined in our last post.

More specifically, while the requirements of:

  • multi-dimensional category taxonomies
  • global virtual “product” masters
  • centralized master data management
  • centralized risk (and compliance) management
  • supplier development and innovation program management
  • real-time on-line collaborative category plan creation

are necessary conditions for category management excellence, they are not in and of themselves sufficient conditions. Why? First of all, simply creating categories by lumping similar products into groups based on some arbitrary characteristic (such as proximity in the UNSPSC taxonomy) is not true category management, so it’s more than just taxonomy support – it’s the right taxonomy. Similarly, centralizing data in a global product master is pointless if that master cannot be used to accurately and informatively analyze category spend. Centralized risk and compliance management is good, but only if the right information gets back to the right systems that are used day-in-and-day-out by people in the field (that certainly aren’t using the Supply Management source-to-pay platform). Program management is good, but only if it is the right program being managed. And the plan has to be a strategic plan that generates value, not a tactical plan that just keeps the wheel turning.

As such, the platform also has to enable:

  • true category spend analysis
  • market analysis
  • forward-looking category requirements
  • linkages between the external customers, sourcing, and internal customers
  • deep workflow linkages with SRM and S2P

And it has to support the best practices that get result. For deep insight into what those are, we recommend the three-part series on Getting a Grip on Category Management by the doctor and the maverick over on Spend Matters+ (membership required).

Part 1: A History Lesson
Part 2: Some Basic Approaches
Part 3: Advanced Approaches