If the future of supply chain lies in a globalized, networked world, then most likely, the future belongs to sourcing vendors.
The advent of the web has fundamentally transformed the supply chain like no other category of business. Sourcing vendors realized that the only way to tap into the sourcing and spending patterns that are evolving globally is to leverage cloud-based technology.
Through these investments, sourcing vendors have become more connected and increasingly mobile. Consequently, these organizations have closely integrated with partners in an effort to eliminate product mismatch, provide up-to-date availability information, and generally avoid other problems arising from the lack of a common data/platform.
Today, the cloud is further transforming the nature of sourcing itself. This online platform enables the adaption of new crowdsourcing strategies in which prospective suppliers (not only those providing goods but also those providing intellectual labor and professional services) compete in a global marketplace on a bid-by-bid basis.
Of course, this kind of online sourcing is in its early stages of development. Today, proponents are trying desperately to iron out all the delicacies of automated reputation rating and price setting mechanisms. As these teething issues are resolved, the automation of sourcing and spend management process will rise to a new level of innovation.
The potential benefit of the cloud moves beyond sourcing, though. In the payment world, checks continue to have a significant volume in the overall corporate payments in the US. These check-based payments present problems, not just for the buyers, but also for the sellers. For sellers, of course, check-based payments are time consuming and expensive. For sellers, the inability to track payments and know when payments will arrive is a trial. When payment arrives, reconciling payments against shipments can be confusing.
Today, the market is rife with potential cloud-based payment solutions. Ariba, Concur, Coupa, and Rearden Commerce all provide solutions to cater to the problems pertaining to sourcing and payments. Each solution provider specializes in specific areas like spend management, providing a platform for buyers and suppliers to interact and exchange information, as well as payments.
Even now, and certainly going forward, sourcing and payment vendors are likely to innovate. For example, at least one vendor offers an alternative payment service network. With this type of service, buyers make all payments through the network. The supplier is given a choice of opting in to the network to receive electronic payment or remaining with a check-based payments.
Given the breadth of options, many organizations are moving to leverage the cloud technology to their benefit. Some of these platforms already have more than a million registered suppliers and claim to have a transactional volume of about half a trillion US dollars.
Let us know where you are. Have you moved to the cloud? Or are you waiting for more information? Share in comments about how and when you made the move.