Regardless of industry, Industry Cloud providers tend to provide a relatively consistent set of services, though the importance of these services differs greatly by industry.

1. Document Exchange and Collaboration.  This is, of course, the core offering of most Industry Clouds.  Documents include the entire range of the source-to-settle process (from the buyer’s perspective) or the order-to-cash process (from the supplier’s perspective).  In industries with perishable capacity, highly specified, unique goods or one-time transactions, many of the documents are related to the important process of matching buyers to suppliers with the right capabilities and capacity.  Examples would include temp labor, print, ocean shipping, ad buying, manufactured parts, logistics, travel and entertainment–all of which have examples of IC providers.  In these industries solicitations, inventory inquiries, RFPs, bids, scheduling, and collaborative product/solution design tend to dominate.

In more commoditized industries–indirect goods, food retail, mining, high tech, healthcare, insurance the emphasis of the Industry Clouds will be less on the “matching” process and more on the efficiency of the transaction between known buyer and supplier pairs.  These are the transactional “bread and butter” of POs, Invoices, ASNs, payments remittances, acknowledgements, inventory notifications, etc.  This is the functionality the large EDI networks have been very successful in historically and in which some industry consortia made headway — by moving these docs to the internet and making them more collaborative.

2.  Source to Settle and Order to Cash applications.  Most successful Industry Clouds started or moved into providing applications on one or both sides of the document exchange they facilitated.  These applications “opened” the documents and consumed the information inside them–providing matching, evaluation, aggregation or other services.  Ultimately, this information was fed into ERP.  These are applications that go deeper into the sourcing or procurement process of the buyer or the selling or receivables process of the seller.

The creation of these applications is where the Internet broadly, and the new wave of SaaS entrants started to make their dent against EDI networks.  The EDI networks standardized information exchange to the extent they could, but tended simply to move the documents electronically, without respect to what was in them and how to consume or add value to them.  EDI eventually added these applications, in some cases, but it is still a sideshow for them. (EDI also tended to avoid the more collaborative processes and industries that required near real-time collaboration).

3. Industry Specific Content.  In many industries with high numbers of “skus” and served by distributors (think retail, healthcare, foodservice, mro) a critical service of the Industry Clouds has been to normalize, enrich and standardize the content to enhance the search process for buyers and to improve the order to cash process for suppliers.  The same has been true at the supplier level for industries with very different types of capacity–like print providers, hotel/meeting providers, or tool and die providers, or on-site serviced providers.  IC providers in these industries have offered standardized content on supplier capabilities, safety, or other critical parameters at the supplier level, rather than product level.  In both cases, the idea is to provide a better search or transactional process based on vertical-specific knowledge and/or standardization.  These ICs seek to become a de-facto standard for the “language” used by the industry and the directory of its buyers and providers.

These are the core services that are common across industry after industry.  (Many examples will be forthcoming posts on specific Industry Clouds of interest.)  Some Industry Clouds have added a variety of additional services based on which side of the industry is concentrated.

  • Leveraged Purchasing.  ICs that sell to fragmented buyer bases have some times tried to build consortium buying services based on their industry specific content.  Some of the GPOs in healthcare were formed on this basis and started to evolve into ICs and vice versa.
  • Industry specific sourcing consulting.  ICs with unique knowledge of industries, their spend patterns and supply bases often started by leveraging sourcing technology to provide members with this service.  ICs in consumer packaged goods, retail, chemicals/rubber, and other industries made this a core service and some never evolved much beyond this.
  • Financing.  Some ICs have dabbled in helping their fragmented supply bases gain not only visibility into their order-to-cash process, but also provide financing to those suppliers.  In industries where buyers have a low-cost of capital and suppliers a high one, this makes a lot of sense.  The use of P-cards is a form of this in high volume, low dollar transactions.

There are dozens of Industry Clouds across a similar number of industries that have little in common on the surface, but if you look a little deeper, you often see variations on the first three sets of services above–applications, document exchange, and content normalization all based on the mutual source-to-settle and order-to-cash processes of buyers and suppliers in an industry.

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