First of all, here are the posts to date.

In Part I, we reviewed what Alan, Charles, David, Eric, and Jason had to say. In this part, we review what everyone else had to say.

Jean-Philippe Massin told us the future lied in the Extended-Enterprise Concept. In Purchasing, the trend will be towards industrialization, commoditisation, and automation; specifically, sell-side vertical e-Marketplaces with a commodity focus will become more numerous. These e-Marketplaces will feed globalization, only top performers will survive, and the purchasing department will evolve into a business in the extended-enterprise, managing the aggregation of independent top-performing companies in the network that work together to supply products and services as effectively as they can. The purchasing function will start to look more and more like trading as purchasers of the future will need to digest hundreds of parameters in order to forecast performance, select the best option, and change suppliers at breakneck speeds to maximize their company’s performance.

Jon Hansen offered a trio of posts that told us there is more to e-procurement than software and that strategies that centered on free (open source) software were fraught with risks. In his first post he points out that process, and not technology, is ultimately the main force behind successfully achieving results in terms of efficiency, spend rationalization, and spend reduction and indicates that he believes this will continue to be the case. In his second post he pointed out that achievers have more faith in their own team’s ability to understand and assess what needs to be done and that he does not expect this to change. In his last post he emphasizes that even though it’s not the technology, one still has to be careful of the technology chosen as the wrong technology can be fraught with risk. In the case of free open source software, there is the lack of imputability when software is developed via internet collaboration.

Tim Minahan, extending a train of thought started in a post by Brian Sommer, notes that we have not yet begun to tap the true value potential of supply management software. Future systems will address the major shortcoming of today’s systems, which is that systems today don’t help people make the decisions they struggle with before they enter data on a screen. Tomorrow’s systems will enable new processes and guided analytical scenarios that were previously considered impossible due to fragmented procedures, insufficient communications and data access, and inconsistent skills. They will guide buyers – regardless of skill set – toward the right sourcing and supplier management decisions. True innovation will come with technology that can inform buyers (and other executives) of the right business decisions.

In my prologue post, I noted how one of last year’s predictions by our leading spend management prophet Jason Busch might be on it’s way to reality. Last year, he predicted that securitizing direct materials and capacity was in sourcing’s future and that suppliers would benefit from the model as well as buyers. Then a study comes out by Haim Mendelson and Tunay Tunca of Stanford’s Graduate School of Business that finds that strategically using both fixed-price contracts and open market trading, supply chain participants can create greater efficiencies. Furthermore, both consumers and supply chains as a whole will benefit from these efficiencies.

In my main post, I noted that Spend Analysis Based Cost Modeling Decision Optimization are going to be the seven words of saving grace for tomorrow’s sourcing organization that wants to survive beyond the next decade. The only way companies are going to be able to maintain costs, yet alone achieve savings, is by getting a firm handle on costs and, more importantly, by identifying and achieving savings opportunities not previously explored. This is going to require an improved understanding of the cost drivers of what you are buying (cost modeling), and understanding of where variability exists, either within past buys or against market indices (spend analysis), and what the best award scenarios are (optimization). But it won’t be three applications at three different stages of the sourcing process, it will be one, and it will be at the beginning, center, and end of the sourcing process.

In essence, this years posts revolved around the common themes of talent and technology – and focussed specifically on the continued need for an appropriately assembled team, advanced analytics and optimization, and better process-based decision support software for tomorrow’s professionals. In the future, sourcing technology will be more powerful, easier to use, capable of guiding even the most novice of users through the process, and enable the optimal decision using advanced analytics and optimization. Tomorrow’s technology will merge the functions of general business analyst and sourcing agent into the single role of strategic sourcing professional who will lead the profession to new heights.

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.

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!