To say that the supplier network business model itself has crossed the chasm would be an understatement. For companies like Ariba/SAP, network revenue has become one of the very core components of overall growth — and the network model itself has become a key value proposition to customers, including supplier enablement, transactional connectivity and supply chain risk management. We will be talking about networks and related enabling technologies, including cloud, platform as a service (PaaS) and blockchain, with ISM at the Global Procurement Technology Summit taking place on March 14–16 in Baltimore.
Supplier network business models may continue to cause consternation in the vendor community, but fees aside, there is little else to dislike about supplier networks, at least from a procurement perspective. And as supplier networks continue to take advantage of new technologies, the models (and value proposition) continue to get broader as well. In 2016, we expect to see supplier network providers:
- Begin to more regularly get involved in trade financing activities, including invoice discounting
- Continue to build partnerships with card providers and payment specialists to provide increased visibility, speed and flexibility around the movement of funds from account to account, including integration with trade financing activities
- Start to encroach on the territory of electronic data interchange (EDI) for direct materials spend and supplier connectivity, and the enablement of industry- or process-specific scenarios (e.g., VMI)
- For areas like e-invoicing, generally blur the line between what is delivered as a network service and what is delivered as a SaaS/cloud business application
- Embrace platform-as-a-service (PaaS) models that externalize architectures for development and integration and leverage more internally-developed and third-party apps into their offerings (for both buyers and suppliers) that range from simple plugins (e.g., for currency exchange or specific environmental compliance) to much more
- Explore the possibility of becoming a “source of truth” for vendor master data information, allowing users to subscribe to “feeds” for continuously updated information to be fed into their own systems (beyond just speeding up initial onboarding)
- Continue to invest in (and refine) value propositions centered on the mining of network data through new types of analytics services
Networks and platform business models are changing procurement. Join the conversation at the Spend Matters and ISM Global Procurement Technology Summit on March 14–16 in Baltimore.