Today, we are wrapping up our series on supplier management technology with an article on Supplier Innovation and Development (SI&D).
This is an area with less attention from a technology-support point of view — due in part to its people/collaboration focus and lack of required support. Many suite and supplier management providers offer basic collaboration and project management capabilities, but to drive innovation, more supplier and product development is needed.
And, as organizations are more reliant on suppliers, being able to collaborate closely with your suppliers and benefit from their subject-matter expertise is increasingly important. Or, as Ron Goldman and Richard Gabriel state in their book Innovation Happens Elsewhere, “It’s a plain fact: regardless of how smart, creative, and innovative your organization is, there are more smart, creative, and innovative people outside your organization than inside.”
So, let’s have a look at some of the more specialized capabilities needed to strategically collaborate with your suppliers.
Supplier Innovation
Most supplier management solutions or modules have the capability to communicate with suppliers in different ways as well as perform basic project management. But the ability to set up innovation challenges to all (or a group of) suppliers, sets a true supplier innovation solution apart. While this might be done with email or messaging within most procurement solutions, there needs to be a capability to list and compare the incoming ideas and suggestions, and promote those rated as most valuable into proper innovation projects.
However, project management capabilities in standard procurement solutions are often basic and focused on delivering on specific tasks (e.g., to remedy a supply issue, address a risk issue, or something straightforward). Managing larger innovation projects that sometimes involve multiple suppliers is different. This requires more advanced features to align on goals and provide proper visibility for different stakeholders into both progress and performance.
And when the innovation project itself is finished, it’s necessary to track the benefits or results of the innovation (especially if there is some gain share model set up).
Product and Service Development
Product and service development projects are not that different from innovation projects. They are perhaps more focused and only target a couple of suppliers. They might also require integration with product lifecycle management (PLM) solutions to ensure easy access to drawings and specifications, etc.
Regardless of it’s innovation or product development projects, it’s also important for the procurement organization to get a holistic view of all the planned and ongoing innovation projects. This is necessary from both a prioritization and workload management perspective, as well as to ensure there is no unnecessary duplication of similar initiatives across the organization (perhaps more important for larger more complex enterprises).
More Supplier Management Technology Research Coming
While this wraps up our series on supplier management, you need not worry: We have more research on this topic coming — so stay tuned!
This week I’m attending Digital Procurement World (DPW) in Amsterdam. If you are there, don’t hesitate to say hi! I will share my thoughts on this major conference in next week’s article.
And as always, feel free to reach out with any questions or comments to us at Ardent Partners!
RELATED RESEARCH
Magnus Mondays — The Supplier Management Tech Series — Part 1: Platform Capabilities
Magnus Mondays — The Supplier Management Tech Series — Part 2: Supplier Information Management
Magnus Mondays — The Supplier Management Tech Series — Part 3: Supplier Performance Management
Magnus Mondays — The Supplier Management Tech Series — Part 4: Supplier Risk Management
