For Sourcing & Vendor Management Professionals

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	July 30, 2009 Enterprises Should Push Supplier Networks To Deliver Interoperability The Plethora Of Discrete Networks Detracts From ePurchasing's Value by Duncan Jones with Andrew Parker, Andrew Bartels, Sean Galvin, Philipp Karcher

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Executive Summary

Enterprises use supplier networks to trade electronically with their suppliers, but they find that insufficient cooperation between rivals limits potential progress. Chief purchasing officers (CPOs) and their ePurchasing program managers struggle to get full adoption because suppliers are reluctant to use all the multiple networks and single-buyer portals that their various customers specify. Network interoperability is technologically straightforward, but real barriers exist, such as the lack of a commercial model and large vendors' reluctance to help smaller competitors. Once consolidation starts, the natural imperative of scale in the technology business will transform the market into one in which a few large, successful, interoperating networks enable buyers to reach all their suppliers, however small or physically remote. CPOs can support and encourage this process by ditching their buyer-centric approach, providing suppliers with choices, and insisting their network providers interoperate with their peers.

TABLE OF CONTENTS

• The Supplier Network Market's Fragmentation Hinders Its Growth
• A Few Interoperating Networks Will Dominate The Enterprise Market

RECOMMENDATIONS

• CPOs Can Help Drive Supplier Network Interoperability

WHAT IT MEANS

• Clients Of Small Networks Should Consider Switching
• Supplemental Material
• Related Research Documents

This is an excerpt