Our ongoing Adoption series continues – but, before drilling down into why the different supply management technology adoption rates are what they are, we wanted to present the market adoption rates by enterprises of a few other supply management solutions used to support procurement (and accounts payable) processes[i].
Our last article looked at the primary applications which support the Source-to-Settle process. While the solutions below are not required to automate the source-to-settle process, they can each help significantly and have become increasingly important in driving incremental value for the procurement organizations that do deploy them.
As you can see, these solutions have been adopted by fewer than 25% of the enterprises in the market – this is significantly less than the most frequently adopted supply management solutions like eProcurement or eSourcing. These solutions have not been uniformly adopted and somewhere between 41% and 53% of all enterprises have no current plans to ever use them.
These solutions have been around for quite some time so we do not believe that anyone could argue that their “newness” in the market is the primary reason for low adoption. These solutions may fall lower on the priority list, but given the high numbers who have no plans to use these solutions, it is our view that a general lack of awareness for these solutions has been a problem and that more education is needed – in sum, the value proposition for each is not very well understood in the larger marketplace.
Education and marketing (which are sometimes often blended) can play an important part in establishing a market for newer solutions.
For Chief Procurement Officers, this means that it can be very valuable to have an in-house supply management technology expert or experts – people who spend time tracking and understanding the market – like category experts.
For solution providers, there are far too many recommendations to provide here (also, this guidance is part of what we provide under Ardent Partners’ advisory services so we won’t include them on these pages). It is, however, very important to avoid complacency. It can be hard to remember that just because you spend all day talking and thinking about your solutions’ value, it doesn’t mean that your company’s views have been understood and accepted and now saturate the market. You need to be relentless, you also need to be clever.
[i] This is based upon my recent research report CPO Rising 2011: Innovative Ideas for the Decade Ahead which can be downloaded here, here, or here (registration required at each).