If you read my predictions post, you know SI hates predictions posts. It fully despises them because the vast majority of these posts are pure optimistic fantasy and help no one. Why are the posts like this? Because no one wants to hear the sobering reality off of the bat in the new year and the influencers care more about clicks than actually helping you.
But given how dangerous and costly the hopeful fantasy has become, not only did SI swallow its disgust and give you a realistic predictions post, but it’s going to collect and lay bare the most dangerous of the predictions that, even if seemingly innocuous, will lead you astray if you believe them. And now some of the influencers and LinkedIn aficionados are taking up the claims, and the charge, but like many other claims, they are overstated.
Today we tackle the first three, but you can expect this to be the first of many posts as dangerous prediction posts flood your feeds for the rest of the month.
1. The “Great Convergence” Accelerates
The claims of of the ORChestration providers is that all roads lead to them, the convergence will accelerate, and you won’t have to worry about what you need because, as long as you have orchestration, you’ll have it all!
For example, if you want to use the largest orchestration provider in S2P, your are limited to the platforms they have already integrated. The same goes for the second or third largest. Plus, if the providers you want to integrate aren’t reasonably sized Source to Pay providers, good luck expecting the workflow to support them appropriately.
Moreover, they were built to minimally support the existing solutions, not emerging solutions in the Source to Pay and extended Supply Chain Marketplace. In other words, the convergence will continue at a snails pace, but it will never be great!
2. “X” Finally Gets Modern Attention
It doesn’t matter what X is — if X has been needed, but ignored, for the last ten years, it’s NOT going to all of a sudden be addressed this year. For whatever reason, it will continue to be ignored.
Example #1, Cybersecurity.
As per my recent post on breaking down the risks: IP / cyberattacks, the risk of cyberattacks has been high since 2014, a year when 71% of organizations were affected by a successful cyberattack! Ten years later, 70% of small to medium sized businesses are still getting hit by cyberattacks. (Which means that if it was going to get major attention, shouldn’t 2014 have been the year?!?)
Nothing has changed — the reason? Cybersecurity is seen as a cost, not a return. So, when a successful attack results in significant losses, organizations spend on improved cybersecurity, and ignore it until the next significant successful attack hits, and that is the only time they will spend for new systems across the board, and that’s it. That’s why cybersecurity, inside and outside the organization, won’t get any more attention this year than last year.
Example #2, Risk Management.
There’s a big reason it’s been the exact same risks in the state of procurement studies and reports for at least the last five, if not the last ten, years. It’s because, despite the fact that risks keep increasing, no one ever does anything about it … there’s no additional investment in risk management software. Why? Again, it’s seen as a cost and not an investment. And when you’re already paying for insurance, why pay for what, at best, seems like more?
Even though the cost of insurance will soon be unaffordable given that natural disaster and fraud losses are going through the roof, if you can even get insurance at all, risk management solutions are still being ignored by every organization that hasn’t suffered a major loss as a result of a risk-related event. (And who knows if insurance will cover AI losses when AI escapes the vending machine? It’s a question you should definitely be asking!)
Example #3, Direct.
That’s supply chain, right? Right?
Wrong! But that’s the view that the vast majority of Source-to-Pay providers have taken since the beginning. Sure a few big suites picked up a few smaller players that specialized in direct sourcing, but that’s about it from the big players. And there are a few startups here and there, but they’re all overlooked, underfunded, and not getting any traction.
Because it’s hard. Damn hard. And the majority of S2P players don’t want hard. They want easy. They built easy. They sell easy. And that’s all they want to do. (And, often, all they can do!)
We could continue, but you get the point.
3. One of the big legacy S2P suites will go out of business.
This is a prediction straight from the genius of Gary Wright. Only a Dream Weaver would predict this! This has happened exactly once since our space began in the late 1990s, and it wasn’t exactly going out of business, it was a big acquirer deciding the space wasn’t profitable enough and shutting the vendor down. Specifically, it was IBM shutting down Emptoris and shunting all the customers to SAP Ariba in 2017.
Every big provider in this space is controlled by PE who have poured tens, hundreds, or thousands of millions (that’s billions) into the firm. If it starts losing money, and if they think they can’t turn it around, rather than shutting it down, they’ll flip it to another firm at a loss (to recover some investment) who will pick up some fire sale acquisitions, integrate them, update the UX, install a whole new management team, fluff it up, rebrand it, and bring it out with a whole new spin. Like ERPs, Suites never die. Even if they’re twenty years behind the times.
So if a new big player hits the scene, check under the covers, do a bit of research, and dig up those skeletons. PE knows how to make everything old new again, but tech is not like fashion, and you don’t want two decades old SaaS, as that’s just the same old sh!t.