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By now, everyone has heard of social networking and Web communities. Many of us use Facebook and LinkedIn and MySpace to build personal and professional connections. We rely on Wikipedia and other wikis for information, and make our own contributions. We share photos on Flickr, post videos to YouTube, read and write blogs, use bookmarking tools like del.icio.us and StumbleUpon, and subscribe to RSS feeds.

We participate in community Web sites and message forums to learn and share information on just about every topic under the sun — pet care, bobblehead dolls, classical music, Harley Davidson motorcycles, you name it. And many of us buy in a community model.

Amazon, for instance, is in effect a buy/sell community that leverages aggregated data to inform prospective purchasers what other like-minded individuals have bought. If you buy on Amazon, or research electronic products at Cnet.com, chances are you read reviews from other buyers. On eBay you check seller ratings.

Those reviews are critical to buyer satisfaction and the market success of sellers and their merchandise. That’s the power of community. It swaps out “me” for “we.” It puts a premium on collective intelligence in a participatory and distributed model available to anyone with an Internet connection, anywhere in the world, to the benefit of all.

While communities and social networking flourish, many enterprises continue to languish with basic business functions. Many small and medium enterprises (SMEs), for instance, rely on paper-based processes and costly, complex on-premise applications to run procurement. The problem isn’t just that conventional procurement results in high costs, inefficiency and wasted resources. Those are only the symptoms.

The core problem in SME procurement boils down to sub-par communication, information access and knowledge sharing — pretty much the polar opposite of consumer-oriented Web 2.0 communities, when you think about it. These issues afflict all parties in a procurement network — buyers, accounts payable managers, end-user employees, inventory personnel and suppliers. And they extend across each step in the procurement cycle, from requisitioning to purchase order management to receiving, inventory management and invoicing.

Thinking Outside the Procurement Box

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