My guest this week on The Procuretech Pub requires no introduction to anyone who is familiar with the digital procurement space. Dr. Elouise Epstein is Partner at Kearney in San Francisco and author of the book Trade Wars, Pandemics and Chaos: How Digital Procurement Enables Business Success in a Disordered World.

We have an informal and very open discussion about procurement technology's past, present and what direction the future trends are moving in this space.
Procuretech's evolution, where it's at and where we're headed: The Procuretech Pub with Dr. Elouise Epstein
Elouise begins by giving a whistle stop tour of her career and some of the things she's seen in the digital procurement space along the way.

From its beginnings, where best of breed led the way, through the rise of the suites and now to a more emerging hybrid model.

She explains how around 2013, Kearney began receiving calls from enterprises who had implemented what I now often refer to as "legacy suites", saying that users didn't want to use them and they weren't seeing their return on investment. It wasn't really until 2020, where Covid definitely seems to have given the market a push, that organisations started to adopt more of a "platform-based" approach with an increasing emphasis on a best-of-breed tech ecosystem.
Elouise's "spider diagrams" and the current "platform" trend
"The suites failed to deliver and there is legacy sunk cost investment" and as a result of that, often these suites are used as a platform from which companies build out their tech stack.

Elouise is a big critic of the big suite approach and is an advocate of the platform approach, where this is built upon through best-of-breed technology. We just don't have 100% the ideal, perfect platform that we need just yet. The software used as a platform has ended up being in that role kind of by default, and there isn't a system built to act as a platform in its core function just yet.

Building their own platform can also be an option for very large enterprises who have the IT capabilities in-house to do this. This is an approach for the brave / well resourced IT departments, but advantage of this strategy is that each "module" can easily be exchanged. Using a legacy suite as the platform doesn't allow this to happen as easily for P2P, or S2C to some extent.
Will the legacy suites survive this pivot?
I ask Elouise what the future holds for these suite providers with this market backdrop. While the market leaders are secure, especially with SAP Ariba and Coupa having implemented App Stores to allow easy bolt-ons and integrations for best-of-breed solutions, some of the others are "under duress". She sees the suite market as being "propped up" to some extent.

Who will come in to challenge the market leaders? Will someone from outside procuretech come in to challenge them, such as Salesforce or AWS?

And, where will the others go if they survive this? It could be that they pivot more towards the mid market, but that would obviously mean a significant realignment of their pricing model and features offered in order to compete and flourish in this market segment.
How useful or reliable are the "best-of" lists when evaluating the market?
Elouise is openly critical of analysts and consultants in general and sees the hype as being self-serving.

She starts off by saying she's not a fan of 2x2 evaluations because they create artificial markets rather that have to fit into that specific evaluation framework. Much of the innovation doesn't neatly fit into a box, and innovation is constantly changing as the market evolves.

How the data is being used and how the evaluations are put together is important to be able to truly appreciate and evaluate which procurement software is best for a specific business, based on their own unique, individual criteria....