Early this year Digital Procurement World published an interesting analysis of how the technology of procurement has evolved during latest 30 years. In 1990 started an era of ERPs. That was followed by the era of Integrated Suites which started in 2004. That era lasted over 10 years and ended in 2017 when the startup revolution started. Now we’re living in the Best-of-Breed era.
What does the latest change mean for the managers and executives operating in the procurement of manufacturing companies?
From integrated suites to best-of-breed solutions
We at Jakamo saw the change in the summer of 2019. Something happened. Our product as a vertical platform solving a focused challenge in an innovative way for a dedicated industry gained interest. Our product-market-fit was proven a few years before, but in 2019 the mindset in the market changed. The era of Best-of-Breed hit the waves in the procurement of the manufacturing ecosystem. The market was ready for the change and we started to grow.
The fundamental change for the manufacturing executives was that they were no more impressed if the sales pitch of the software vendor was built on the following promise: “Our suite solves everything from sales to manufacturing and from R&D to supplier collaboration”. This value proposition did work in the era of the Integrated Suites, but no more in the new era. The market was filled with new technologies and innovations giving plenty of market alternatives for the executives. Today executives can choose the best solution for a certain challenge that can be connected as an add-on with the chosen suite or platform.
API economy allows the connectivity
The development of the API (application programming interface) economy had a crucial role in the evolution of procurement technology. APIs provide a smooth data flow and integration between various software. In other words, APIs connect software with each other. The software that is able to provide well-documented and standard APIs has a significant strategic advantage in the market of the Best-of-Breed era.
Nowadays, the software vendor’s connectivity capability is often the number one requirement for the purchase decision of the executives. If your software product is only standalone and does not have APIs to ensure smooth data transfer from your software to another, you are facing a significant risk in your business. Today the sales pitch of a software vendor should state: “Our product is the best industry-specific solution for your major challenge, it can be connected with your chosen platform and systems allowing smooth data flows and real-time information for your people”.