… and the fact that, apparently, hundreds are now thinking about building their own custom ProcureTech systems (as highlighted by a DPW Kearney presentation and referenced in THE REVELATOR‘s remote dispatch) demonstrates that the current marketing and methodologies being employed by software vendors, consultancies, and analyst firms are abysmal failures (and reinforces my statement that PROCUREMENT STINKS and that we have to clean it up)!
(The only partial exception is if a software company is building a piece of tech for a company of its size and industry, i.e. tech sourcing for startups, then it should use its own software and eat its own dog food, but it should not build any modules it doesn’t intend to sell.)
Why?
1. A company that is NOT a software company is NOT an expert in building products.
Moreover,
1b. A company that has not been validated to be best in class across the board in a function (and no such company exists, FYI) is NOT an expert in what it should be doing process wise, only on what it is doing process-wise.
As a result, it might not even be in the best position to design digital workflows, and especially not automated ones. Furthermore, even if it could do better than most on the digital workflows and automation, that doesn’t mean it can identify the right technologies for those workflows or the right stacks to build them on. And it certainly doesn’t have the chops to ensure the technology is secure, respects privacy rules, uses safe third party tech, keeps it up to date, etc.
In order to get these chops, they would have to hire a full IT team, which is very expensive, and would soar the lifetime solution cost to 10X or 20X what a solution offered by a modern SaaS provider with a multi-tenant stack would cost. With a significant percentage of that cost Up Front!
There only other option is to farm it out to a consultancy, and who are they going to choose? Probably a Big X. (You know, usually the exact opposite of who you should be hiring for niche / new technology, as pointed out in our post on When Should You Use Big X. )
2. Building takes years, and by the time it’s built, it’s out of date.
Companies need solutions now, not solutions in two, three, or five years … solutions that, by the time they are rolled out, are already outdated.
Moreover, by the time it’s rolled out, your other organizational systems are going to have changed, and then you have to integrate all the other systems to your custom solution on your own as your vendors won’t have out of the box connection options to your custom system, and that’s additional work and expense before you can get your outdated system rolled out.
3. It’s not about the product, it’s about the process.
Which means what a company really wants is a solution that embodies standard best practices with configuration options that allow the buyer to tweak it to their specific needs. As well as a solution that integrates well with their current ecosystem and provides the people who need it access when they need it as well as visibility when they need it. (In today’s verbiage, intake and orchestration, which is not new … intake was fully there in Coupa 1.0 [with respect to what the platform could do] in 2006 and Ariba was working on e-Forms back in 2000.)
3b. Furthermore, it’s about the data that drives that process!
And the most important requirement is the ability to export all system data in a standard format at any time! (Which is what almost everyone overlooks, because systems come and go, but as long as you have the data, it doesn’t matter.)
The Conclusion
And when you look at this, and you look at who’s out there, you have to wonder why more than a few companies couldn’t find at least 3 to 5 potentially good options for any ProcureTech need. The only reason, as far as I can tell, is they can’t identify them. (Because they are out there for almost every need in almost every organization in almost every industry across almost every region. As someone who has reviewed over 500 solutions in depth over two decades, the doctor says this with certainty.)
So why can’t these companies identify good vendors? As has been repeatedly commented on LinkedIn by the doctor and THE REVELATOR: there’s too much noise!
Marketing has devolved into a constant stream of one-way buzzword soundbites … which we tried to demystify a bit in the linked article earlier this year, but AI-backed, orchestration, autonomous, smart, etc. is all meaningless, and people know it.
In order to make a proper technology identification, a buyer needs to identify technology that solves the problems they are facing every day — which means they need focussed, educational, messaging that tells them about real problems the vendor’s technology was designed to solve. (Something we used to have a lot of in this space, but something I haven’t seen much of since the big M&A mania in the latter part of the 2010s where ProcureTech became the new FinTech, big enterprise investors moved in, and it became all about sell, sell, sell [and not solve, solve, solve].)
Now, this is something we should be seeing from analyst firms, but we don’t. We just see the same old maps with the same old enterprise vendors which hand over six, if not seven, figures a year to the firm to be included in their quadrants, waves, and marketscapes. Maps which are meaningless when each axis has like six different, usually subjectively scored, dimensions meshed into one.
And of course consultancies aren’t helping because the mid-markets exist by specializing in implementing smaller suites and best-of-breeds and living off of implementation referrals to the solutions they’ve learned to implement; while the Big X will quite happily tell you to build your own because they expect they will be the ones to design and build it, charging you tens of millions for something you might be able license for 1 Million a year, implement for 250K, and integrate for 500K if you are happy with an 80% to 90% solution (and then use the Big X for staff augmentation or custom extensions at a lower up-front cost, saving money for more valuable services later when you should use the Big X (and not cheap out on a low-cost consultancy without the experience). (It would be very poor business for the Big X to turn you away!)
But at the end of the day, while it’s still buyer beware and a buyer should do his homework before engaging any vendor, we can’t help but think that a share of the fault lies with the majority of vendors who have abandoned solution first, education first methodologies and allowed revenue operations to switch to a marketing and sales first approach with no questions, please.
the doctor can’t wait for the coming rapture where THE REVELATOR has predicted that 75% of ProcureTech vendors won’t survive unscathed, because only two groups of vendors are going to survive — the really big suites with enough customers to keep going on current install base, and the new vendors who are smart enough to go back to basics, solve real problems, and lead with real solutions. Those are the vendors that SI has focussed on since it began, and the vendors that you need!