Not Just Any Crowdsourcing: How Peer-Group Data Provides B2B Community Intelligence that Reveals Undiscovered Opportunities to Spend Smarter
Popular consumer crowdsourcing apps like Waze and Yelp utilize thousands of mini-reports from a community of users – a mosaic of information – to form a larger picture that can be used for many different purposes. From avoiding traffic jams to finding the best fresh pasta in town, apps driven by data from a community of users are a hot, growing trend. Why?
The principle: We are all smarter together
As an individual, you don’t always have the information you need, while often the crowd or community does. Today’s crowdsourcing apps are providing previously unavailable information to users – saving them time, inconvenience, and money. It turns out that all of us are smarter than any one of us.
How does the crowdsourcing trend apply to the B2B world?
We’re all familiar with how digital advances made in the consumer world evolve into the business world, from expectations for user-friendly, Amazon-like interfaces to specialized, eBay-like marketplaces. In most cases, adapting the technology for business requires modifications, tweaking, and innovative thinking. Sometimes it works, often it doesn’t, and occasionally a B2C technology gets vastly improved for B2B… this is one of those stories.
Beyond crowdsourcing to peer-group data-driven community intelligence
When it comes to crowdsourcing for business purposes, we don’t want information from just any crowd. We want information from our crowd, or ‘peer group’-sourced information, and we want it predominantly fact-based and comprehensive. While consumer apps like Yelp can help you find a restaurant of a style and price range that you’re looking for, the data can be incomplete, self-selecting, and subjective – for example, frequently only people who really like or dislike a restaurant are motivated to write a review, leaving blind spots in the system that would be risky for a business to rely on.
Another example – Waze will identify problems (say, an accident ahead on your planned route home), and give you recommended actions to avoid or minimize the problem (an alternate route to get to your destination). That’s a great application of crowdsourced intelligence, and in many places using Waze can give you a competitive edge on your commute home. But, I want more from community intelligence.
I want Waze to tell me, “Hey, your car is making a sound that we’ve learned – based on listening to and tracking thousands of cars of your make and model – is an indicator that your car’s X is about to go bad. You should go to a mechanic and get it adjusted to avoid a costly repair job down the road. And, by the way, here’s a list of highly-rated mechanics near you.” Is that too much to ask? For Waze it is.
There’s a Community Revolution underway in B2B
According to Coupa CEO Rob Bernshteyn, there’s a Community Revolution underway in B2B that allows us to draw upon the insights and experiences of other companies to spend smarter. The power of communities has been obvious forever, but accessing that power in real-time wasn't possible until recently. (To learn more about what the Community Revolution will look like and what it will mean for you and your business, get a free excerpt of Rob Bernshteyn’s book, Welcome to the Community Revolution.)
When we adapt consumer crowdsourcing to the B2B world, we want to improve upon a number of things. For example, we want:
- A large, global data set that can be sliced in different ways – rather than largely local, regional, or incomplete data sets.
- Predominantly objective data and facts, rather than opinions – for example, wouldn’t it be impressive if Yelp also tracked and reported on how many people became ill in the 24 hours after eating at a restaurant?
- Real-time, automatically-gathered, comprehensive data – rather than data-dependent upon users voluntarily reporting or reviewing at any time, which leaves gaps and blind spots. For example, user-reported traffic information can be incomplete and out of date, sometimes leading you to take a less-than-ideal route.
- Comprehensive prescriptive feedback – feedback that doesn't just tell us what's happening, but what we should do. Why can’t Yelp, after recommending a restaurant, also tell me what I should order based on my nutritional goals and taste?
While Waze and Yelp can’t do what I dream of yet, there are already a small number of innovative, visionary B2B tech platforms that are delivering to business leaders exactly what I’m dreaming Waze and Yelp might someday do for drivers and diners.
What does peer-group community intelligence look like for B2B?
How does this apply to the B2B world? First, community intelligence can provide peer-based benchmarks and insights that enable you to discover previously unknown opportunities for improvement. Comparing your performance and spend activity in key areas with those of others in your industry offers substantial value through several avenues, including vendor diversification and consolidation, new supplier selection, and vendor risk mitigation.
Without benchmarking, you don’t know what you don’t know
It starts with getting your spend under management because the more spend you have under management, the more benchmarking you can do. The more benchmarking you do, the more performance improves.
Without benchmarks, you don’t know what you don’t know. For example, when you take four days to do what your peer group does on average in two days, you learn that, even while four days may have seemed “pretty good” or “good enough,” you have the opportunity to improve – because your peers and competitors are already there. And, if others are doing it better, you better work to catch up. Without benchmarks, you don’t have context and don’t know what to focus on. With benchmarks, you are informed and empowered.
How do you compare to global industry leaders across core BSM processes?
Measure your source-to-contract, procure-to-pay, and expense management success by exploring key performance indicators across four core business spend processes to benchmark where you stand with Coupa’s Benchmarking Report.
Stay tuned for Part II of this blog, What Don’t You Know About Your Spend, where we’ll cover Coupa’s recipe for B2B community intelligence success and not-so-secret (yet hard to replicate) sauce, along with a number of real-world stories of Coupa Community Intelligence in action.