Purchase to Pay Predictions

Purchase to Pay Predictions

Posted by Pete Loughlin in Procurement Software, Purchase to Pay, SaaS 03 Mar 2011

Have you heard about the internet fridge? The one that detects that you’re running low on semi skimmed and sends an email to the grocery store to get you topped up? Well you should have. It’s been announced as the next big thing every couple of years for at least the last 15. I saw a prototype in London in 1996. It’s never taken off and it never will.

The internet of things – the idea that everything is plugged into everything else via the internet – is the current manifestation of the futuristic fantasy. It was the same fantasy that had us believe that in the year 2000 we’d all have robots doing our cooking and cleaning, that we’d be flying to work just like the Jetsons and going on vacation in Westworld.  But 2000 was roughly the same as 1999 and that was about the same as the year before that and not that different from 20011. The fact is, most parts of our world don’t change that dramatically or that quickly and where there is dramatic change, it’s notoriously hard to predict.

Purchase to Pay Predictions

So my first prediction for the future of purchase to pay is that it will look roughly the same as it does today for some time to come – in most respects that is. My second prediction is that some things that were predicted to make the big difference 10 years ago are going to quietly delivery in the next two years – and they are going to make a big difference. A very big difference.

Cloud based procurement software

I first heard the term Business On Demand from IBM in about 2000 I think. The marketing terms have evolved a little since. The Saas term is a little geeky for my liking – like lots of IT terms, an acronym designed to keep all but those in the know away from the secrets inside the book of IT magic spells. But today, the concept of the cloud has caught the imagination. In one respect calling it the cloud is dumbing down what is going on but I prefer the term “cloud”. It’s a much more useful term for business people who want to concentrate on business rather than IT. It says “trust me, it works”. You should specify a business solution in terms of terraflops and bits per second –  you should specify it in terms of SLAs and measure it success in terms of business focused KPIs.

We’ll see more and more cloud based purchasing applications and they’ll play a big part in reducing the cost of our purchasing infrastructure. We are already seeing “free” services offered by the likes of Coupa on the e-procurement side and Tradeshift on the e-invoicing side. We’re not seeing Ariba offer free e-procurement and e-invoicing just yet but we will soon as they replace their revenue streams with their more sophisticated value add offerings like dynamic discounting.

Purchasing InsightIt’s very rare that great ideas have instant impact. The telephone, one of the most significant inventions in modern times, was far from an overnight success. The industrial revolution didn’t happen one summer, it took several decades for modern manufacturing methods to mature. And for every success there are a dozen failures.

When we look at what we predicted would happen in the near future 10 years ago, we stand a chance of being accurate about what will happen next year. But not the internet fridge.

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