The Suites, ERP and Big Tech Strike Back A

When everyone writes you off in favour of the new, new thing, there is one thing to do to prove the young turks wrong: thrive.

Never write off the Turks! A lot of people are these days, but remember they are one of the oldest known civilizations on the planet, with continuous settlement dating back to circa 7,500 BCE (at Çatalhöyük). But I digress. (Even though I should note one of the next powerhouse S2P suites is likely to come out of Istanbul … see the recent archives for more information on a rich caffeinated Turkish Punch.)

Back to The Prophet‘s prediction that 2024 will be the year where procurement and supply chain suites reclaim mindshare (and more) in the market. (More specifically, S2P [Source-to-Pay] suites, supply chain suites, and ERP providers.)

Which will happen. The only unknowns are how fast and in what areas.

As you get older, you get wiser, and the big corporations have not only learned how to make themselves indispensable, or at least irreplaceable, and how to identify, and attack the shortcomings / risk posed by smaller players and, even if they lose some new business in the short term, reclaim it in the long term.

According to The Prophet, this is firstly because suites and big tech have the capital to fund innovation (through acquisition) in lieu of Series B and C venture rounds.

While big players have, more or less, lost their ability to innovate internally (as their risk and audit departments quash innovation faster than a minnow can swim a dipper), they didn’t suffer^* during the COVID years, or the recovery, because those subscription payments kept coming, and now, especially with the drop in available VC and PE capital, they alone have the money to spend to buy whatever they need. And, as The Prophet has indicated, they will.

Moreover, where they can’t, or won’t, buy, they’ll “exclusively” partner with small specialist providers in Direct that make their interfaces more user-friendly and integrate with related applications, use those partners as lead-ins, and pretty much lead the partner down a development path that props up their suite (because they make it more financially lucrative for the smaller partner to do so).

This is also secondly because of the backlash of SaaS proliferation.

While Procurement wants best-of-breed, they can only deal with so many application providers because each new throat-to-choke is yet another provider they have to manage. So unless they truly need something unique or best-of-breed offering wise, an 80% suite solution will do for many departments.

It is thirdly because no one has cracked the direct materials procurement code at scale, especially in the smaller providers. Direct more or less requires a deep, sophisticated, integrated suite of capabilities that cross multiple stand-alone modules in indirect. It’s hard for a smaller player to attack. (And that’s why, as The Prophet notes, Direct is still owned by ERP and Excel!)

Finally, as cash again becomes king, it is because we will see the SaaS Office of the CFO.

Which is true, and which will be discussed again in Part 8, we’ll also see an upsurge is the acquisition of SaaS management tools, which will hopefully lead to a crackdown on Sales and Marketing that have an average of 20 tools each, which do, at most, 2 different things. (And maybe, finally, free up some budget for the CPO for the tools the organization ACTUALLY needs.) (So it’s going to be a good year for those SaaS [Subscription Cost] Management tools!)

So keep an eye on your current suite/ERP provider as well as the competitor suites targeting their market (who may soon bring back the offers of free data transfer/migration services and configuration replication to lock in a multi-year deal).

^* Sure they had to tighten the belt and stop having their corporate Christmas parties in penthouse suites while telling the CEO his expense account was no longer unlimited and he couldn’t upgrade the corporate jet, but that’s not exactly suffering.