April 28, 2021

Who will master Digital Platformisation, the future of Purchasing IS

By Patrick Chabannes

Dozens, if not hundreds, of new specialised purchasing IS solutions, doped with new technologies, are shaking up the hierarchy of the market leaders. The purchasing community sees this as a business value, while the Leading Software vendors see it as a danger. With their Source to Pay software suite, the latter are trying to regain control with a new business model: The Platformisation. What if their customers choose to create their own platform? Dive into the immediate future of Purchasing IS.

Knowledge of the keys to the survival of the historical Purchasing IS vendors – the business, the size, the Cloud, the new technologies – enables us to anticipate their future. The survivors of the merciless natural selection process have built, module after module, a Software Suite that embraces multiple business needs with varying degrees of success. Their challenge will be that of size to offer themselves a propaganda budget, a good ranking by analysts and their promotion by their CIOs and advisory firms. Not all of them will win this ruthless race for size. The losers, because of a lack of vision, technical debt or excessive financialisation, will have to find a valuation in a niche market (geography, vertical) in order to be bought out with honours by one of their competitors.

With courage and nerve, young software companies are entering the arena. Solving business problems forgotten by the Top Vendors of so-called complete software suites; they bring agility, freshness and value to Purchasing Departments, which, it is necessary to salute them here, do not hesitate to offer them their chance.

Among these start-ups, we prefer those that combine business skills and new technologies (Cloud, AI, Blockchain…), offering a new vision where new technologies are the means and not the end. The former will probably remain in a niche, while the latter will be able to mobilise the necessary energies to break through the canopy.

Platformisation: the new business model of the major IS Purchasing vendors

The large IS Procurement vendors, the current winners in the race for size, losing in competence or agility what they gain in influence, will have to use this to control their customer base on the lookout for expert solutions. Building on the backbone of the Source-to-Pay process, they will add to the imperfect integration of their acquisitions, the solutions of hand-picked Partners. This will generate new revenues, muzzling their partners by promising them a captive market, you Purchasing Departments, to whom they will bring turnkey solutions under the pretext of managing the complexity of integration in a black box with unknown limits. 

Platformisation must be addressed by purchasing departments and their IT departments

Large companies have already sounded the alarm. Initiatives are multiplying. Platformisation is and must be mastered by the Customer without subcontracting it to the Source-To-Pay editor whose influence is already too great. Indeed, there are already many examples of subscription price increases by the S2P market leaders at the end of contracts. Without being careful, one day your suppliers will become their customers – there are so many of them – and their partners, their obligees, will see their margins decrease and their face prices increase.

Mastering the integration of your tools is the guarantee of mastering your business agility. 

Your competitiveness within your customer and supplier market implies particular needs equipped in various ways: in-house software tools, technological tools, niche editors, major editors. They are your working tools. Mastering the integration of your tools is the guarantee of mastering your business agility. Like a craftsman, entrust the maintenance and management of your tools only sparingly. Invest in their mastery, which is the only way to achieve excellence and control the ambitions of business editors.

Lectori salutem, Patrick Chabannes

“In an age of universal deception, telling the truth is a revolutionary act. »  G Orwell in 1984.

Column written in Lettre des Achats, April 2021. See it below