If the future is a networked world, then we may well find that the future belongs to sourcing vendors. No other category of vendors has had its landscape transformed so fundamentally by the advent of the Web, to the extent that leading vendors such as Concur and Ariba took early decisions to wholly rearchitect their products to become cloud-native, while an entire new breed of cloud vendors have grown up alongside them.
They knew that the only way to tap into the sourcing and spending patterns that were evolving as the world went online was to become cloud-native. In the process of adapting to this connected, always-on, and now increasingly mobile environment, they have moved further and faster than most other categories of enterprise software vendor.
Today, the cloud is further transforming the nature of sourcing itself, enabling new crowdsourcing strategies in which prospective suppliers -- not only of goods but increasingly also of intellectual labor and professional services -- compete in a global marketplace on a contract-by-contract (or even microtask) basis. This form of online sourcing is still in its early stages of evolution, as it irons out the intricacies of automated reputation rating and price setting, while guarding against the constant attempts of participants to game each platform for short-term profit. Once these teething issues have been resolved, automation of the sourcing and spend management process will step up to an entirely new level of innovation, which will likely have repercussions across other application stacks they'll link into, such as HR and revenue management.
This overview of today's leading cloud supply chain and spend management vendors is the fifth and final in my series of blog posts setting out a cloud perspective on the old, established categories of enterprise software. Previous posts looked at, the , the and the new, .
These reviews take a strictly cloud-only stance, and I focus on larger enterprise offerings rather than those for SMBs. Some vendors may be past or present consulting clients or work with me in the EuroCloud industry association, but know not to expect any favors from me in my independent writing. This is a necessarily brief overview, and if you feel I've missed any important players or points, please use Talkback below to add your feedback. If you want to drill in further, one expert I can recommend is fellow Enterprise Irregulars blogger Jason Busch and his colleagues at Spend Matters.
Concur. The granddaddy of expense management in the cloud, Concur Technologies was founded in 1993, had its IPO in 1998 and then completed the transition from conventional licensing to subscription-based cloud multi-tenancy in the full glare of public financial disclosure -- "Don't do it as a public company," CEO Steve Singh later advised. Now firmly established in the cloud, Concur is continuing to grow its ecosystem of partnerships, ranging from travel providers such as hotels group InterContinental, to participants in its newly launched App Store. Its $120 million acquisition of travel planner Tripit in 2011 was the most noticeable of a number of steps it is taking to enable travel and expense management on the move. Today it is working to make sure that its mobile applications take full advantage of location awareness, recommendation engines and push notifications to act as an intelligent travel assistant to users on the road.
SAP/Ariba. Long before its acquisition by SAP, spend management vendor Ariba migrated away from its on-premise heritage to become a cloud applications vendor. It has now become the core of SAP's cloud offering for managing suppliers, although this is not the first time SAP has ventured into the cloud on the back of an e-sourcing acquisition. One of Ariba's srongest suits is its network of one million registered suppliers, which claims an annual transaction volume of close to half a trillion dollars. Such huge numbers demonstrate the value that can be amassed by building up a global network in today's networked economy, even if Ariba sometimes spoils the effect with high charges for processing electronic transactions. The challenge for Ariba and its parent SAP is keeping its offering relevant in a fast-evolving world.
Other supply chain. Moving goods and services around the world requires a vast hinterland of hidden support services in fields such a freight management, financial and customs documentation, warehousing and logistics, and much more. Among many innovative and specialist cloud players here, one to watch is GTNexus, which manages both physical and (after its merger with TradeCard) financial supply chain processes. Others to mention include B2B integration giant GXS, which operates a SaaS portfolio to manage supply chain activity, supply chain management vendor e2open and, on a different tack, cloud bill of materials management specialist Arena.
Coupa. The fastest-growing of the next generation of spend management vendors, Coupa has always led on bringing ease-of-use to business procurement. Over the past few years it has rounded out its offering with a range of spend optimization tools, including the to add improved mobile functionality. It is becoming a serious challenger to the established enterprise vendors in its space.
Rearden Commerce. One of the most overlooked names SaaS players in the spend business, Rearden Commerce has been playing a long game to build its next-generation vision of automating connections between buyers and sellers, backed by $340 million of venture and strategic investment to date. In late 2010, it swallowed up smaller spend management player Ketera, although a later realignment saw Rearden doubling down on its core commerce network offering.
Other spend management. Other pureplay SaaS vendors in the space include Perfect Commerce and leading commerce network operator Hubwoo. Notable players serving the SMB market include Bill.com, which automates invoicing, bill payments and collections,, online invoicing, billing and accounting vendor Freshbooks, and ExpenseWatch.com (owned by Amazon CEO Jeff Bezos).
Other expense management. Despite the dominance of Concur, there are many others around, including Certify and SMB-focused webexpenses. Adding mobile functionality early has helped open up opportunities for more recent newcomers Expensify and Shoeboxed.
Crowdsourcing. There's an explosion of experimentation and innovation as the world of crowdsourcing matures. Traditional contingent labor sourcing providers such as IQNavigator should probably be looking over their shoulders at these uniquely cloud-powered providers who bring on-demand to the world of clerical and professional services. Beyond the more established freelance networks such as eLance and oDesk, there are a range of more specialized crowdsourcing marketplaces springing up, ranging from 99Designs for creative work and XTM Xchange for translation, through to Blur Group's platform for everything from artwork to accounting. Others such as CrowdSource and CrowdFlower focus on harnessing microtask labor. These services are not yet hooked into other enterprise procurement and workforce management applications, but their impact when that happens will be enormous.
See Gallery: How analytics can improve supply chain agility
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The promise of analytics
Data is constantly being created as a byproduct of customer interactions and business activities. That data can have tremendous value because it can be used help you take the pulse of all the factors related to your business processes and customer needs. Today’s analytics systems can be easily used and understood via simple dashboard interfaces, allowing you to tap into incredibly powerful information your business can use to grow and thrive (without having to be a statistics major).
By accurately anticipating consumer trends based on historical data, real-time data, and future predictions, your organization can put that knowledge to work to become more agile, efficient, and responsive. The right mix of technology and strategy will enable you to gather data, analyze that data, and take sure-footed action based on what you’ve learned from that data so that your product can produced, stored and moved smoothly and at whatever speed your customers require.
This presentation will show you how data can be used to help your supply chain respond dynamically to ever-changing customer needs.
You will learn how an efficient supply chain can make the difference between leading a market and being left behind.
You will discover the many ways business data you may already have can turned into a gold mine of strategic value, opening opportunities you may never have known were there and spotlighting efficiencies you might never have been able to exploit otherwise.
Finally, you will explore best practices and specific customer use cases for how you can mine historical data, tap into the flow of real-time as-it-happens data, and even predict future supply chain needs using advanced analytics.
A simple product
The bottled water industry is huge. For our purposes, water in a bottle represents a relatively simple product that we can use to illustrate supply chain complexity.
Even water is relatively complex
But when you think about the components of the product, you start to realize that even bottled water is a relatively complex product.
Three main supply chains
Since there are three main components, there are three main supply chains that have to be accounted for. When you move to something like a smartphone, the complexity becomes epic.
Each of these stages needs to be accounted for. In earlier days, supply chain data was recorded and reported after the fact. But now, we can get real-time analytics, which makes for much more agile production processes.
Breadth and depth of supply chain
The need for agility and analytics becomes clear when you think about the breadth and depth of the supply chain for industries like these.
Evolution of tracking and insight
As IT has evolved, so too has the level of tracking and insight provided by our supply chain systems.
Supply chain management isn't just one application
Supply chain management isn't just one application. It's an array of systems (often involving many companies) that has to integrate together seamlessly and reliably.
Managing the flows
Part of that process is managing the flows. Physical material flows from raw material to final production, while information has to flow in both directions, giving each stage in the process the information necessary to manage operations.
When talking about supply chain, we're almost always talking about an international operation. Even something like a simple coat has materials sourced from all over the world.
When something interrupts the chain
Another challenge facing supply chain managers is what happens when something interrupts the supply chain. This is when responsiveness, creativity, and agility become critically important.
Disasters and other factors
Beyond natural and man-made disasters, there are many other factors that can impact the successful production of a product.
Each link has risk elements
Each link in the supply chain has risk elements associated with it. As a product moves up the chain, it's essential that risk management (and the details that help showcase and mitigate risk) are made clear to production executives.
As supply chains become more agile
As supply chains become more agile, it's important to keep risk down, reduce cost, and reduce time to market, all while maintaining or improving the quality of the final product.
That's where supply chain analytics truly comes into its own. It needs to provide end-to-end visibility, across companies, across supply stages, and even across nations.
Best practices for managing risk
Here are some best practices for managing risk. All benefit from good visibility into the global supply chain.
Keep in mind that your agenda is not necessarily that of your supplier or customer. Your company's priorities may not match those of your partners.
Bringing order, transparency, and interoperability
In the context, then, of managing risk, reducing cost, and reducing time-to-market while at the same time improving quality, software developers have been looking at how to bring order, transparency, and interoperability to supply chain management. Let's look at what the future holds.
Sometimes forecasting can't keep up
Most supply chain managers attempt to forecast demand and other factors related to what materiel has to move from one point on the globe to the other. But sometimes forecasting can't keep up with a rapidly changing world.
Responding to all contingencies
Forecasting, by definition, means getting in front of change. But some events happen so fast that executives need to respond in real-time. Even if there's a pre-designed game plan for a variety of contingencies, real-time analytics can let you know when those situations come into play.
When looking for vendor solutions, make sure that the products not only track components, but all of the transportation elements as well.
Customer demand is highly volatile
Keep in mind that in challenging economies, forecasting gets thrown to the winds, because customer demand is highly volatile. Building systems that can be instantly reactive may save you considerable frustration and expense.
Multi-player nature of supply chains
Look for solutions that take into account the multi-player nature of supply chains. Look for strong international components as well as standards-compliance for interop between various vendors' systems.
Unique, cross-enterprise views
Managers of a supply chain need to have a unique, cross-enterprise view of the process. Rather than competing as one enterprise vs. another, the game really becomes one multi-vendor, multi-nation chain vs. the systems, efficiencies, and choices of another.
Customer is in the driver's seat
As you move forward into the future of supply chain management, keep in mind the customer is in the driver's seat. You're really managing a demand chain, one where responsiveness is the key to success.
And that brings us full circle back to analytics and agility. In order to be responsive to on-demand customer requirements and volatile international environments, having real-time insights into every stage of the supply chain becomes a necessity When sourcing solutions, this is the factor you should look most carefully at as you make purchasing decisions for your IT applications.