The ecosystem of service, solution, and tool providers within the procurement and supply chain world is rapidly growing. The need to automate processes, ascertain risk, drive sustainability, and work collaboratively with both internal stakeholder and suppliers are just a few of the areas that the ecosystem can assist. But what are the benefits of this growing ecosystem and what at present are the shortcomings?
We asked Kathrin Adam senior consultant in the EY organization’s supply chain services for her take on this conundrum. See Kathrin’s thoughts below.
The expanding ecosystem of service, solution, and tool providers presents a tremendous opportunity for procurement teams to enhance their capabilities. This growing network can help procurement automate processes, mitigate risks, drive sustainability, and improve collaboration with both internal stakeholders and suppliers. However, to truly leverage this ecosystem and move beyond just having a seat at the table, procurement teams must carefully navigate the benefits and shortcomings while selecting the right partners efficiently.
Benefits of the Growing Ecosystem
One of the key benefits of this expanding ecosystem is automation. Service providers offer tools that can streamline repetitive tasks such as purchase orders, invoicing, and supplier onboarding, freeing up procurement teams to focus on more strategic initiatives. This not only improves efficiency but also reduces the likelihood of human error. Furthermore, risk management is another area where this ecosystem provides tremendous value. Tools that offer real-time risk assessments, supplier performance monitoring, and compliance tracking empower procurement teams to make informed decisions and minimize exposure to disruptions.
Additionally, this ecosystem plays a pivotal role in driving sustainability, which increasingly requires a holistic, product-view approach across the entire supply chain. To meet sustainability targets, it’s not enough to focus on isolated metrics or individual suppliers; sustainability must be built within the ecosystem, ensuring that data flows seamlessly across every stage of the supply chain. By working collaboratively with suppliers, service providers, and internal teams, procurement can gain access to primary data that is critical for understanding the environmental and social impact of each component. This collaboration enables more informed decision-making, providing the levers to enact meaningful change in areas like carbon reduction, ethical sourcing, and circularity. Without these ecosystem-driven insights, it becomes nearly impossible to truly achieve ambitious sustainability goals.
Collaboration tools also enhance the relationship management between procurement teams and internal stakeholders or suppliers, improving transparency and aligning goals. This can strengthen partnerships and drive more effective negotiations, ensuring procurement has a truly strategic role in the organization.
Shortcomings of the Ecosystem
Despite its benefits, this rapidly growing ecosystem can have some shortcomings. One of the main challenges is integration. Many tools and platforms operate in silos, making it difficult for procurement teams to integrate them seamlessly with existing systems. A lack of interoperability can lead to fragmented data and inefficiencies. Additionally, the sheer volume of options available can be overwhelming, making it difficult to differentiate between providers and choose the right fit for specific organizational needs.
Efficient Selection Process
To compare and select providers in an efficient time frame, procurement teams should adopt a structured approach. First, it’s essential to define clear criteria based on organizational goals—whether it’s automation, sustainability, risk management, or cost efficiency. Conducting a thorough needs assessment helps to narrow down the list of potential providers. Then, leveraging tools like request for proposals (RFPs) or vendor scorecards can provide a more objective comparison across multiple providers, based on specific metrics like functionality, integration, and cost.
Additionally, seeking peer reviews, benchmarking against industry standards, and participating in vendor demos can accelerate decision-making. Procurement teams should also prioritize vendors that offer flexible, scalable solutions that can grow alongside the organization’s evolving needs.
What Vendors Could Do Better
Vendors could improve by focusing more sharply on the buying persona—understanding who is making the purchase decision, who will be using the solution, and who controls the budget. Tailoring their approach to these distinct roles is essential for aligning their value proposition with the organization’s priorities. Vendors also need to communicate in benefits, not features. Rather than just listing technical capabilities, they should clearly articulate how their solution drives value, improves efficiency, or enhances sustainability outcomes. Startups, in particular, tend to excel at this, while larger corporations often focus too much on features. Startups are often more agile in their messaging, offering a clearer narrative that highlights direct benefits.
Additionally, vendors could work on better integration with existing systems and platforms, ensuring that their solutions fit seamlessly into procurement workflows. Offering more customizable solutions that can be tailored to the unique needs of different industries or organizations would also add value. Furthermore, greater transparency—on total costs, implementation timelines, and post-implementation support—is essential for building trust with procurement teams.
Finally, vendors should actively foster innovation by staying ahead of trends like digitalization and sustainability. They should offer not just tools but also insights and strategic partnerships that help procurement teams achieve their broader organizational goals. This includes providing tools that enable collaboration across the entire supply chain to track primary data and ensure that sustainability is embedded in every stage of production and procurement.
About Kathrin
Kathrin is a senior consultant in the EY organization’s supply chain services, advising clients in the FMCG, pharma, and manufacturing industries on leveraging technology and data for compliance and sustainability. Before joining the EY organization, she built a sustainability software startup and began her career in ERP consulting. She also spent five years working at one of Germany’s largest manufacturing companies, gaining experience in Germany, the USA, Australia, and Denmark.
Kathrin holds an MSc from the Frankfurt School of Finance & Management and is currently a PhD candidate at RWTH Aachen University, researching blockchain technology for sustainable supply chains.