I think digital economy will start including a new criteria for vendor selection in terms of expectations of technology capabilities for vendors (e.g. in my role with sourcing I've already seen changes to our vendor base depending on who could not integrate into our own digital supply chain). Vendors who can digitally share their own supply chain and integrate into sourcing systems to bring the transparency to the end user will be important. The excitement a car buyer gets when they see where their car is along the production line will be extended to multiple industries, but low capital / high labor vendors have not made the investments to integrate with the digial economy expectations.

Hi Don,
There are three elements in this new Digitial world. 1) Emergence of Digital platform 2) the Buyer capabilities and 3) the seller capabilities
Both the Buyer and Seller need to be on the same platform to be able to talk and conduct business. If we look at the Sourcing and Procurement Mega Trends in next 5 years (or even earlier) there is going to be a paradigm shift in the Procurement World where the focus will be more on Asset management, Profitability, and a massive shift from Buyers' market to Suppliers' strang hold. No longer Suppliers will be big scape-goats and they will have equal say in the business dealings. The days of 5% Y-O-Y cost reduction arm twisting will have its natural death fulled more from Profitability and Scenario building analysis.
Digital is a new platform which will replace the age old "relationship" platform. This change itself will bring its own benefits as well as downsides. One of the major change will be direct Customers will enjoy better service, quick turn around and an efficient end to end train (Block-Chain) amidst massive competition and high level of transaction visibility.
Hope I was able to add my two cents Don.

Hi Don,
The Digital Economy may have threefold impacts:

1. The way companies will interact (processes, tools) having impact in internal and external processes. You can imagine that CRM (Customer Relationship Management) and SRM (Supplier Relationship Management) could merge in the future because they act on the two sides of the business relationship (customer/supplier, supplier/customer).
2. The content of the products and services with more digital, or new digital native ones.
3. The competences of salers and buyers adding digital aspects.

In addition, the Digital Economy is also introducing new forms of companies (start-ups, scale-ups, unicorns...). To take advantage of this new offering portfolio, B2B companies have to revise their sourcing process.
Finally, with the emergence of data diffusion through various channels (Internet, the Web, Social Networks...), B2C (B2B2C, B2B2B2C...) companies must take this new market trend into consideration for their interactions with their customers or consum-actors.

Hi Don,
The sourcing and vendor selection process will change as the result of the digital economy,
i.The digital economy is a 'global' economy, so your selection of vendors that may have been purely local before has now widened substantially. (In both who to select and also impacting the standards of what's now acceptable.)
ii. As an immediate economy, everything happens much faster so there will be suppliers who are simply not able to do business as 'efficiently and effectively' as one would prefer within the digital economy.
It will speed up every aspect of source, buy, make, move. store, sell.
(At the moment, a digital channel is often co-existing with the traditional business, but the reality is that we all go to the retailers with the knowledge that we can get it cheaper and better and faster on line! And soon the technology will be there which means we dont need to 'go to the retailers' as much as we have in the past.)
iii. The digital economy is creating digital disruption at a rapid pace - business leaders that are not disrupting themselves and learning to embrace their own disruption dont have a very bright future.
There will certainly be suppliers who cannot keep up and who will lose their place in the ever growing digital economy. (This is evidenced by info such as expected life time of companies in f500 (reduces from 80 years in 1920's to expected 15years in 2000), churn in the nasdaq etc. etc.)
So, to the next part of your question, with this change occurring what does this mean for the individual consumer, vs the business or enterprise consumer?
i. Certainly the individual consumer has a lot more power in the process. More opportunities, options, places and choices to buy. More places to be heard should they not be satisfied.
ii. For business or enterprise consumers, and indeed the supply chain in which they operate this becomes a dilemma. Do I stay with my supplier or do I enact my increasing power to select and buy from whomever and wherever I want? And for the supplier to the enterprise consumer, is my business safe with this enterprise consumer or should I be extending my digital platform beyond the enterprise to the individual consumer? Specifically here there will be movement and fallout again.
In conjunction with the factors above driving rapid change, we also have the evolution of digital supply chains and technology such as block chain which is there to assure us of the quality of the product that we are purchasing and whilst completely block chain enabled supply chains are some way away, these will be very important in industries such as fmcg, and pharmaceuticals where our health is affected by the quality of the supply chain, and further, transparent to the degree that any ‘link’ in the chain not able to ‘deliver as expected’ will be 'out' when/if a consumer is affected.
I hope this is helpful.

Don:
Great question. I believe the digital economy presents significant new benefits and challenges simultaneously.
Overall, the “Amazon Effect” will continue to drive a consumer expectation for speed at both the individual and enterprise customer levels. The integration of existing modules or addition of current standalone modules within digital sourcing platforms such as SAP/Ariba will help deliver that speed by allowing buyers to transact the sourcing process seamlessly from end to end – customer need definition, supplier identification, selection, contracting, quality and performance management, and risk and compliance. Those modules will then plug into broader enterprise applications and blockchain technologies to further connect the process. Enterprise customers will benefit from a more comprehensive and confident view of their sourcing decisions and end user customers will have a larger menu of choices with faster delivery than ever.
However, it’s not going to happen overnight. The major source-to-pay platforms have a ways to go to truly connect all of the upstream and downstream modules from a workflow perspective. The potential is incredible, but they’re simply not there yet. There may be a challenge with that development keeping up with customer expectations on speed. Additionally, the continued evolution of this technology will challenge many industries such as Financial Services where regulatory bodies are already expecting levels of vendor management and risk management that are simply not possible today, down 2-3 tiers within the supply base. The technology will increase expectations of the regulatory bodies while exposing the gaps that exist, in particular related to data security, anti-counterfeiting, and authentication.
The jury is still out on how this will affect smaller suppliers in aggregate. On one hand, the digital economy levels the playing field and provides smaller suppliers access and exposure they’ve never had before. At the same time, it could be alienating some suppliers that might not be able to afford or manage the cost and process associated with being a part of a digital sourcing platform.
Another area still yet to be determined is how the digital economy will impact supply chain innovation. Do you or others on this thread have any thoughts on this topic?
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