Rant On Jason, Rant On (Procurement Solution Providers Are Doom and Gloom Too)

I tried to post this comment on Spend Matters, in response to Jason’s latest rant on Getting Angry about doom-and-gloom procurement practitioners, but his comment mechanism is “broken” due to an apparent mismatch between his CFML and Database (but I’m not a Cold Fusion expert, so I can’t say for sure). So I’m posting it here.

Jason, I hope your next rant is about how this is the time for the vendors and solution providers of the space to stand up and seize their opportunity to shine by helping buyers achieve never-before-achieved levels of productivity and savings that will help them shake the doom and gloom of this recession which, as you point out, provides Procurement and Supply Management with one of the greatest opportunities it’s ever had to shine.

Instead of putting their marketing engines into overdrive and making sure that all of the procurement and supply management departments, who desperately need solutions, are aware of their offerings and the problems their solutions can solve, I’ve seen many (of the smaller) vendors slash marketing budgets to 0 to “conserve cash” and reduce marketing and sales head count.

And instead of escalating New Product Development (NPD) to create leaner, meaner, easier-to-use solutions that can be brought on-line faster (and making use of streamlined out-of-the-box ready-to-start SaaS deployments), they’re putting NPD on hold and eliminating Product Managers, Quality Assurance, and Development Positions.

And most importantly, instead of taking their own advice and bringing in external experts who can help them get lean, mean, and thrive in a recessionary price-compression environment, they’ve cancelled all contracts and put a moratorium on external contractors until the recession is over.

As a result, the obvious has happened. Pipelines have dried up. Revenue has dived (as current customers have less to spend). And, in an effort to “survive”, they’ve slashed head-count by 10% to 50%, further impeding their ability to sell, build better solutions, service existing customers, and, most importantly, take on new customers. But, for some, even this won’t be enough as many of the smaller vendor’s aren’t sitting on years of operating expenditures in the bank. Their investors will likely have them on the block before year’s end. (You have to remember that many of the smaller vendors in this space are VC funded.)

There’s a reason I penned the “Dumb Company“, “Dead Company“, and “Your Marketing Really, Really Sucks” series (links below). I’m seeing the same mistakes being made again and again. Mistakes that were made by technology (based) solution providers in the last two recessions THAT ARE NO LONGER AROUND. Having worked for, and with, a number of start-ups and small companies (and collected piles of worthless stock in the process) earlier in my career, I see the writing on the wall. A number of companies that I thought were the more innovative companies in the space are acting like scared-stiff software providers instead of procurement enablers and blindly marching down the path to oblivion. If we lose them, the Big Co’s lose competition, and instead of thinking that solution X doesn’t need to be improved for 5 years, the Big Co’s will become the ERP providers of our space and we’ll be lucky if they update their solutions every 10 years!

So Rant On! Help me shake these dazed solution providers out of their slumber, because if we don’t, all of the buyers we so desperately want to help are going to suffer.

If you’re a vendor reading this and you think this post doesn’t apply to you, think again. Based on my conversations and observations over the last three quarters, and my personal experiences working for, and with, a number of failed technology providers during the last two recessions, at least 9 out of 10 vendors in this space are making at least one potentially serious error at this point. And while one mistake won’t kill you, in a prolonged recession, it doesn’t take many. So I advise you … take a good hard look at yourself before shrugging this post off and going back to business as usual. I’ve already removed 3 service provider links from my Company List I hadn’t heard of over the past three weeks … and I’m really not looking forward to removing companies I have heard of, talked to, and rooted for.

Summary Link:

Dumb Company

How Dumb is Your Company
Dumb Company
Dumb Company (The Lyrics)
Dumb Moments in Business not Aerospace, Automotive, or Bailout Related
Why Some Companies are Being Dumb

Dead Company

Dead Company
Dead Company II: If You’re Hoarding Cash … (You’re Not Going to Last)
Dead Company III: Fear is the Enemy
Dead Company IV: Avoiding the GraveYard
Dead Company V: More Ways to Avoid the GraveYard
Dead Company VI: New SI Offerings
Dead Company VII: Even More Ways to Avoid the GraveYard

Your Marketing Really, Really Sucks

Marketing is NOT Optional
How to Build a Bat House
The Brain Gives Pinky a Marketing Lesson
Web Marketer, Don’t Be Misled!