Last week we asked what would you accomplish by 2020, which is less than 16 months away. Between 2008 and 2013, all the big analyst firms and thought leadership vendors painted a glorious picture of where Procurement would be by 2020 — a picture which isn’t even close to being a reality. Simply put, the vendors haven’t advanced technology to the point where it was supposed to be and, as a result, while you got more integrated, streamlined, easier to use platforms with friendlier, and sometimes even mobile, interfaces, you haven’t really obtained new functionality.
By 2020, our software was supposed to be smart. It was supposed to be doing most of our work for us. Tactical procurement was supposed to be a thing of the past. Paperwork was supposed to be over and done with. Data processing and verification automated. And Sourcing was supposed to be smart … not just more functional. But that’s what your average S2P platform is. More functional. All of the great advances we were supposed to have in the average platform aren’t there.
But, fortunately, if you’ll step outside the S2P marketplace and look at the best of breed players, across the entire space, you’ll see that most of the functionality you were promised is there, just in bits and pieces across a dozen or so best-of-breed players. So in addition to:
- Invoice Automation
- Supplier Identification
- Automated Supplier Discovery
- RFX Process Automation
- Should Cost Modelling
What else is there?
In our last post, we addressed the issue of RFX Automation, how simple it is, but how very few providers have anything close to RFX automation. So you can imagine how much worse the state of affairs is when it comes to guided workflows across S2P. But when it comes to contract negotiations, the back and forth process is quite well defined, the need to automatically compare versions and identify redlines and analyze deviances from the norm is automatic. When it comes to SRM, evaluation processes, disputes, corrective action management, innovation challenges, etc. the processes are all well defined.
But yet, in just about every suite you log into, the guidance is limited to dashboard summaries, task summaries, and alerts. Two decades old technology.
But the best platforms, including a few leading S2P platforms, are allowing buyers to not only build event templates, but embed those templates with rule-based workflows. One of the S2P providers with a single code-base that we have already mentioned a few times, Ivalua, is one provider going down this road. But another provider that has made in-roads is a mid-size best-of-breed provider by the name of Keelvar that is not only one of the handful (less than ten) of providers that offer optimization, but one that is also investing heavily in AI as well.
Automated Spot Buys
How many times do we go to market for a one-off product, service, or temporary provider replacement for a product that is not strategic, a service that is low value, or a new relationship that could be fulfilled by a dozen different providers. And how often is the product or service a commodity, for which market (should) costs are known? And how often do we have approved or pre-qualified suppliers, or processes for automatically approving suppliers? Often.
But this shouldn’t be hard. For commodities, MROs, and standard services, the organization has well defined requirements, known suppliers, should-cost models, market costs, and current supplier risk profiles. And there are well defined processes and rules that the organization follows. And it’s obvious which supplier has the best products, which supplier has the best prices, and which supplier represents the best award under the organizational goals.
So why can’t spot buys be completely automated? There’s no reason they can’t be. The right workflow automation, the right rules, and the right real-time market data is all that’s really needed … because that’s all that an average buyer uses to effect a low dollar or low strategic buy when there is a well-defined process to follow.
But for those organizations that want to take this low-value tactical procurement off of the table and allow their people to focus on higher value strategic activities, there is an answer. One such answer goes by the name of Xeeva. A lesser-known P2P provider that just raised 40M, Xeeva already had the platform, and experience, doing this across a wide variety of low value / non strategic product categories. And now that they have been well funded, this is one provider that should be taking things to the next level.
And that’s not all. Stay tuned as we review our final missing technology and vendor.