Living “In the Age of the Platform”

Living in the age of the platform

Every so often my wife and I start binge watching a new series in the age of on demand. The latest show we started is called The Wire on HBO. An acclaimed crime drama series that takes place in the gritty urban inner-city streets of Baltimore, I immediately came to recognize that it’s set in a time before the advent of smartphones, where in an early episode street gang members were seen pawning the latest Nokia 3310 series phone.

Undoubtedly, the Nokia 3310 was revolutionary in its day. The phone sold extremely well, with 126 million units sold worldwide, making it one of the most successful phones ever. Having owned one myself, it was well known for the long-lasting battery life, where the device could run for days on end without the need to plug it into the charger. In fact, due to its success and nostalgia for a simpler time, on 14 February 2017, it was reported that a modernized version of the 3310 would be unveiled at the 2017 Mobile World Congress in Barcelona. The new version will be made by HMD Global Oy, the Finnish manufacturer with rights to market phones under the Nokia brand, with a price point of 59 euros.

Dialing up the power of the platform

But despite its simplicity and robust design, the one thing this phone could never deliver is what we have today: Smartphones — mobile phones that are connected to a platform. Whether it be an Android or Apple, today’s smartphone has become more than just a phone. These configurable devices provide the power of a mobile computer, with access to the Internet and a universe of downloadable apps.

Moreover, while we use similar mobile phone networks today, the speed and access to information is almost unrecognizable in terms of capabilities and uses beyond what we considered revolutionary back in the day (i.e., SMS and mobile calling).  What may have taken three or four technical devices in the past to accomplish multiple tasks (i.e., texting, calling, emailing, Internet, video, gaming, etc.), can now all be accomplished on one device.

The parallel path of procurement

The relevance of smartphones is that they parallel the evolution of how we think of procurement technology. I recall that in the early days of procurement, pioneering companies such as Iasta and b-pack (Nokia 3310s of their day) became the recognized leaders in their space. To that end, core tasks were divided into the notion of upstream segments (analytics, sourcing, contract management, supplier management) and downstream segments (purchasing, catalog management, invoicing) of the wider procurement marketplace.

The barriers to providing one solution for all of these features under one provider were limited to the ERP providers. More often than not, they did not think strategically about sourcing, contract management or procurement; that is, until smaller best-of-breed players identified a need. These market niches undercut the wider ERP efforts of one system across an entire enterprise.

The dawn of the Cloud

Over time, and with the development of faster Internet bandwidth, movement from client-server to web-based solutions, and the wider development of SaaS from the ASP frameworks, enterprise technology has been completely transformed. This is fundamentally changing how software providers and organizations look at adopting procurement technology. Consider the events of the past five years, and the merger and acquisition of disparate procurement players into wider frameworks that cover the expanse of source to contract or source to pay with supplier management peppered along the way. Having these solutions offered by one provider has become the norm. Determine is an example of this shift in mindset and, in fact, was born out of it.

While pure plays still exist for specific markets, the future and potential of providing all this functionality “on one platform” has become undeniable as a means to manage complex processes across the entire procurement chain. Today, we are facing this transition in the world of enterprise solutions. By way of bringing technologies together, procurement is moving from a feature-focused approach to platform thinking. With the influence of technology leaders, including Amazon, Apple, Facebook and Google, procurement technology providers such as Determine are taking a new look at how to solve traditional problems in a new way. For example:

  • Procurement is moving from addressing savings pipelines to becoming a value platform — moving away from making a product to being a provider of value in the supply chain.
  • Looking at technology that is aligned with stakeholder outcomes.
  • Designing processes for adoption execution.
  • Helping procurement “industrialize” services to stakeholders by using technology to assist in spend planning, project/process management, fail-safing and dynamically adjusting processes.

The era of the procurement virtual factory is here

Tesla Motors’ CEO Elon Musk says that one of Tesla’s core competencies now is looking at building the machine that makes the machine. He expects 10x gains in productivity, not by focusing on improvements to the car, but on how to make it: the factory platform itself.

Applying these principles to procurement, technology providers such as Determine can use this same factory platform-inspired approach to go beyond achieving savings from just spend management.

By building a virtual “factory,” we are looking beyond just delivering savings and innovation. Our goal is to also manage complexity, while adding broader economic value across the entire procurement chain; and look to gain the benefits in, and efficiency through, a unified approach. This is something we describe as “Platformance

In a recent webinar with our guest, Spend Matters, we discussed in depth the notion of platforms and their future. In case you missed it, check it out on demand.

Now if I can only get my iPhone to last longer than a day… otherwise I may need to get that new Nokia. :)

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    Still quiet here.sas

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