dinsdag 17 mei 2011

Information overload - in- or outsource 'Intel 2.0'

Interesting post of Steve Hall on the procurement blog about the changing nature of buyer-supplier relationship.
Some comments on a point he suggests:

  • Greater pricing transparency:  eSourcing and procurement’s intrepid scrutiny into still-cloaked categories are bringing increasing price transparency.  Global trading networks and online communities will take this up a notch, further decreasing the importance of price negotiations.  “The Cloud,” predicts Roy Anderson, former CPO of Metlife, “will force price transparency.  Savings will be tied to things like discounts and rebates for reaching certain volumes or paying early.”

  • Although he certainly has a good point here, I have some remarks:

    1) this greater pricing transparency is highly dependent on good eProcurement software which is professionally implemented and used in a proper way by the organization. Furthermore this eProcurement software depends on the informaiton input, see point 2

    2) Although the internet is providing more and more access to a lot of information (also on price information), it is creating its own pitfall: an overload of information (and what about the reliability of the information?). With this, a new market is created for organizations which deliver the service to deal with the complexity of this information overload. This market is growing with on the one hand the more general search engines which can be used to organize to a certain extent this information (although it's more gathering than organizing it), on the other hand there exist more specialized organizations/communities which focus on specific markets and industries. Nevertheless, I think this 'new' market is still growing, and will be growing along with the increase of the information overload.
    Of course it is not a completely new market because we all know google and similar search engines. Furthermore there are several (more specialized) marketing associations who act in this new market. Anyway due to the growing information overload the role of 'gatekeeper' for information will become increasingly important in the future. It may determine your competitive advantage as organizations and managers act based on the information. Therefore an important question for organizations with respect to the future will be: in- or outsource 'Intel 2.0'?

    Logically, this question adresses more than just procurement, and is a strategic question (of importance).

    3) I think  that, dependent on the market situation, the subject of negotiation remains to take a solid place in the S2C process (especially in conservative slow moving industries) when contracting new suppliers

    Nevertheless, I suggest to read the article of Steve Hall as it is very interesting. Furthermore he also wrote a part II.

    4 opmerkingen:

    1. Kevin Lemmens (blog owner)14 september 2011 om 12:39

      Check out this article ( http://contractmanagementblog.com/?p=147 )

      The market is searching for solution to the overload of information

    2. Check out this article


    3. Thanks for sharing the useful article. The reliability of the information is very important for the business. I agree with you that this question adresses more than just procurement, and is a strategic question (of importance). For example, publish procurement information on the www.whatyouwant.cn, as a purchaser should recognize the fraud businessman.