Category Archives: rants

Dear Enterprise Software Vendor: Should You Fire Your PR and Marketing?

Note the Sourcing Innovation Editorial Disclaimers and note this is a very opinionated rant!  Your mileage will vary!  (And not about any firm in particular, as a few non-isolated incidents opened up a whole new line of questioning.)

In response to a post by eCornell (which is/was here), THE REVELATOR wrote this comment (which is/was here) which is repeated here in its entirety in case it gets deleted, since anytime we tried to have a serious conversation around sales, marketing, public relations, and/or Gen-AI with Big X firms and/or (mid-sized) consultancies and analyst firms, they have quickly deleted our comments, and sometimes their entire posts rather than enter into a real conversation on the subject (and now we have developed an implicit distrust any corporate account and keep copies of everything):

NOTE: The following post was inspired by a comment by Paul Rogers

Despite feeling like someone walking the hallowed halls of Cornell University wearing a “Yeah, Harvard University” t-shirt, sometimes you have to say things that need to be said – which is the purpose of sharing this article.

Ask ChatGPT the following two questions:

? What is the role of the Public Relations professional?
? What is the role of the Marketing professional?

Do you see any mention of end client or customer success as a priority? Whose best interests are PR and marketing professionals focused on? What does the answer to these questions tell you?

Corporate communication has always been about putting a positive spin on business and the brand. It reminds me of the 1986 Richard Gere movie Power – if not a great movie, it is certainly interesting and engaging. Denzel Washington’s role as public relations expert Arnold Billings is worth the price of admission alone.

Unfortunately, beyond the company they represent, are PR and marketing people doing more harm than good?

Thoughts?

To which the doctor responded (which is/was here)

Well, SI, which has repeatedly told companies in our space to fire their PR firms going back to 2008: Blogger Relations, firmly believes that PR firms are doing more harm than good because

  1. you are NOT selling enterprise software to consumers and
  2. it’s not “image”, it’s “solution”!

As for marketing, corporate marketing can be good if it exists to educate and explain, but when was the last time that happened on a regular basis in our space? Over a decade ago … now it’s all AI-this, orchestrate-that, and whatever the bullcr@p of the day is. It’s all buzz, no honey. All show, no substance. All confusion, no clarity. (It’s bad enough that Trump has brought back the Land of Confusion with his populist politics that have taken by storm the first world over, we don’t need it in our workplace!)

So, right now, I’d say at least 6/7, if not 9/10, marketers are doing more harm than good and should be fired with their PR brethren.

There are over 666 companies in our space, and way too many pandering any type of solution you can think of. While we need at least 3-5 in each industry group – market size – geo region – module focus you can think of for competition, we don’t need 30+. Most are not going to survive, especially when most of these don’t have solid solutions built from years of experience that solve real customer problems (as opposed to just offering some shiny new tech that looks good but doesn’t solve the majority of pain points in real organizations).

This means that companies need to focus less on marketing and selling and more on:

  • market research, especially listening to what the real pain points are of the customers they want to sell to (and they need to focus in on a customer group here, you can’t be everything to everyone in our space and any company that thinks it can is the first company you should walk away from)
  • solution (not product) development — not shiny new tech, tried-and-true tech that works
  • market education, explaining what they do, how they do it, and why it solves real pain points after building a solution that solves the pain points they identified in their research

Which means, especially if money is tight, they should forget the marketers and instead focus on hiring researchers and educators. People are getting tired of the 80%+ tech project failure rates. They’d welcome some real insight and real focus on real solutions. If only the market would wake up and realize this!

Top 10 Ways to be Labelled as a (Procure)Tech Noise / TroubleMaker!

For those of you who want to be a noise maker, trouble maker, Debbie Downer, complainer, etc. etc. etc., the doctor can confidently tell you that these are ten proven ways to accomplish that goal! Enjoy!

10. Point out that Tech Failure Rates have reached an all-time high of 88%! (Bain)

(As it is, in Procurement, We Don’t Get No Respect. We’ll get even less if 9 of every 10 projects fail! They’d fail less if … )

09. State that that RFPs for Tech should be Affordable!
(They are a critical first step in proper vendor selection once your need has been identified, and skipping this step has always proven disastrous. And then, after you select the vendor, the next step is to kick of Project Assurance, so the implementation doesn’t go off the rails.)

08. Go further and suggest that Big X SHOULD NOT be used for analytics and AI!
(The reality is, as we’ve stated again and again, limited tech talent is generally NOT interested in consulting — they want to work with the big powerful mega-corps [Meta, Alphabet, etc.] or join the wild west start-up frontier. Those not good enough get scooped up by the consultancies to try and fill the bench they need to staff the projects they sell. Doesn’t matter how good the outdated playbook is if you’re starting with the B-Team if you’re big, and rich, enough to afford it … or the C-Team if you’re not. Also, as we’ve said before, this doesn’t mean you shouldn’t use Big X for strategy, internationalization advice, etc. or the roots where they started where they have, and attract, the best people — just that, like every business decision, you have to be smart about where, and how, you engage to get your ROI. In fact, there are a whole slew of areas we generally recommend Big X for, and sometimes ONLY recommend Big X for, and these are covered in When Should You Use Big X?)

07. Dare to suggest it may be the end of an era for an early ProcureTech suite!

(Is The Third Act the Final Act?) Let’s ignore the fact that there has been more consolidation and failure in this space over the last two decades than anyone realizes, and that the seven suites appear to be sailing the seven seas without a sextant [foreshadowing?]. See SI’s classic Vendor Day Reprise and count how many of those companies are still around as-is. These were representative of the cream-of-the-crop when they were covered. The rate of disappearance is actually higher across the board!)

06. Note that Gen-AI is way overhyped.

(Unless you want suicidal people committing suicide in suicidal self-driving cars, for example. See valid uses for Gen-AI. And note that one of the big analyst firms pushing it in its hype cycle also noted that that it’s failure rate is 85%! [Source])

05. Remind people that intake & orchestrate is not new!

(With intake in ProcureTech tracing its beginnings back 24 years and orchestrate tracing it’s way back over 50 years as it’s just the fancy new name for middleware, which was a term coined in the 60s and implemented in the late 60s/early 70s with RPC being one of the earliest examples. See Point 11 for more hard truths.)

04. Rail against 2*2 vendor maps, and logo maps, as vendor selection tools!

(They are NOT Appropriate for Tech Selection. At most, they can be used to identify vendors to shortlist — but you still need to create a proper RFP! Remembering that:)

03. FREE RFPS are NOT free!

(How many times do we have to tell you There Are NO Free RFPs? Too many, since vendors will NOT get the message!)

02. State that there is no demonstrable ROI for attendees and vendors at big (Procure)Tech events.

(We need better events. A great experience is not business ROI!)

01. Mathematically argue that no business is worth more than a 10X multiple at investment time.

(‘Nuff said. Deeper dive in linked article.)

Now, I don’t know about you, but if wanting

  • (10) tech project success,
  • (09) affordable RFPs for all Procurement departments that need them,
  • (08) value for your consulting dollar,
  • (07) a true picture of the ProcureTech space and where the best cost/value ratio is for all buying organizations (not just G3000s),
  • (06) real AI powered by real HI that delivers real value,
  • (05) solutions that do what they should with (true) open APIs,
  • (04) real solution guides,
  • (03) valuable RFP advice,
  • (02) valuable events for all (not just organizers and consultants), and
  • (01) fair investments across the board for underfunded ProcureTech companies

means being a troublemaker, then make me the leader of the troublemakers! I’ve had enough of platform failures, enough of marketing soundbites, enough of one-way sales, enough of vendor marketing packaged as analysis and advice, and enough BS. Without procurement, there is no business. And, like Rodney Dangerfield, who unfortunately never got it in his lifetime, we deserve a little respect.

Procurement deserves better!

P.S. If you lead a provider organization that wants to do better, please feel free to reach out!

Once the Post-ZIRP* World Hits …

… providers that raised big bucks on vision and overhyped third party tech will begin to fall like dominos. (So choose your provider wisely over the coming year!)

And you knew this was a comin’ after our little lyrical rant on the Post-ZIRP World, especially if you were paying extra attention to THE REVELATOR‘s postings and the following discussion streams on LinkedIn.

THE REVELATOR, who claims that the only “AI” providers who will survive in ProcureTech will be:

  • ? AI Operating System Solution Providers
  • ? Front-End Functional AI Solution Providers

In simpler terms:

  • those that provide a foundation for ProcureTech solutions built on AI tech
  • those that provide AI-enabled front-end for more “human” interfaces to sophisticated back-end technology

Whereas I claim the only providers sure to survive are those:

  • who identified a problem, built a solution to solve that problem (working with [potential] customers), and delivered that solution successfully, possibly without any AI whatsoever (as not all solutions need UI)

The key here, and even in THE REVELATOR‘s examples, is that the company focussed on real-world problems of (potential) customers, built a real solution to solve that problem, and worked with customers to successfully implement that solution.

To this end, after a point was raised about how 2025 is going to be a bumpy ride for many companies that raised too much with their deft timing of bandwagon hopping, THE REVALATOR asked three very important questions that the doctor is all too happy to answer:

1. Will solution providers’ focus shift from funding to addressing the decades-long challenge of the high rate of initiative failures?

Not until the funding starts to dry up again. And even then they will again listen to the marketing mad men and try to save their souls with sound-bite marketing and gimmicks. When that fails, most of those who remain will try to slash costs across the board, focus on keeping and upselling existing customers, and double down on prayer until they can see ZIRP again through the telescope. At which point they will jump on the new hype-cycle driven bandwagon and try to raise cash to build garbledy-gook powered ProcureTech.

With the exception of suites with a large enough install base to survive indefinitely on current revenues (possibly with some significant operating cost reductions), only those currently focussed on solving real problems, and who continue on that path, will double down on trying to reduce not just failures, but even bumps in implementation to make sure every customer is happy out of the gate to the point those customers talk about them with their peers at networking meetups and they have leads coming in without cold calls.

2. With some notable solution map logos or brands running out of cash, how will it impact the post-AI Bubble Burst solution provider landscape?

A lot will disappear. Those who see the writing on the wall now, even though they won’t admit it, are already putting themselves out there for acquisition while the multiples are good. Those who don’t will scramble to merge with partners or take firesale deals just to stay alive. Those who fail at that will just disappear.

3a. What will be the common characteristic of solution providers who remain?

Answered in part 1 – those that focus on solving real problems, and doing so at a fair, sustainable price point for them AND the client, who, since happy with the solution, will continue to renew and even add more modules/capability over time.

3b. What will be the common characteristics of those who disappear?

Those who went all in on the Gen-AI or orchestration bandwagon, didn’t build any unique and original functionality that solves real procurement problems, tried to build a business on overpriced third party tech (not due to third party tech fees, but the ridiculous multiple they have to charge because they raised too much money and the investors are demanding a return), and failed.

* Zero Interest Rate Policy

Is Valuing A Company At Over 10X Ever Justified?

THE REVLATOR asked a damn good question earlier this week in a comment to his Daily Double LinkedIn post where he asked how can Zip’s 2 Billion Valuation, for example, have any basis in reality or merit? Especially when THE PROPHET pointed out in his article on Zip’s Series D funding round at a 2.2 Billion valuation that this was a 40 to 50X revenue multiplier!

As usual, the doctor, was happy to answer, but since his answer is deep within the comments, it’s being recorded here for easy reference.

Damn good question. There’s no basis in reality for a valuation more than 10X (if the solution is currently priced right).

When you consider that most companies can’t grow at more than 40% year over year without imploding, as you can only identify good people, hire, onboard, and train them so fast; including support personnel. And while you can add partners for implementation, but they need to be trained and supported (and until you have a well flushed out “academy” and good Full Time support reps for each project sold through a partner, rapid growth will likely be disastrous); at 1.4x it’s 7 years for the company to reach a 10X valuation.

If this is truly a fantastic company, we’ll allow an average 50% growth rate, it’s about 5.5 years to reach a 10X valuation, which is about as long as any investor wants to wait for a return on their money.

Using this math, in order to justify a 20X valuation, it would require a vendor to DOUBLE prices the minute they received the investment (and screw over the existing customer base while limiting the future customer base). Unless the product was insanely underpriced or the vendor could add a lot of extra value in a short time frame (and neither is likely since a vendor grossly underpricing likely wouldn’t have survived long enough for a raise, and development takes time), doubling the price is just not justified.

Now, double this to 40X and the only reasonable explanation is that the investors are as high as a kite or trying to win a P!ss!ng Contest at their shareholders expense.

And the only way these investors are going to recoup that investment is to achieve rapid up-front growth and flip the investment up the chain until the company is eventually acquired by a mega tech player who’s been around for 40 years and will be around for 40 more … and can wait the 15 to 20 years to get their money back (because that’s about how long their customers get locked in for).

We Need Better Events!

This will probably get me blacklisted by half the events in the space, but I don’t care … especially since I have no interest in going to half the events in our space anyway. (Now, are both sets the same? Probably Not. Am I blacklisting myself from events that might be worthwhile? Probably. Do I care? Well, if you’ve been reading the doctor‘s rants for eighteen (18) years, you know the answer … it’s getting to the truth that matters!)

This is something I’ve been thinking about for a while, but a recent article by Gaurav Sharma on how his buyer’s mindset is bugging him on a point, along with recent conversations on LinkedIn, have convinced me it’s time to write it.

Most of today’s big events are a complete waste of time and money for practitioners and vendors alike! And I’m dead serious.

Why?

Vendor: You’re paying 50K to 100K for that event. When you consider the cost of the booth display materials (5K to 10K); the booth, equipment and services rental (30K+); giveaways and fancy dinners (5K to 10K+); getting and housing a small team there (20K to 40K); etc., it’s a lot of money. And for what? A chance to hock your wares to a small (less than 50%) set of attendees who are also being shouted out by 50 to 100 other vendors? At least half of whom have no decision or spending authority at the end of the day? Besides the ability to say for three (3) days: “look at us, we made it“?, what do you get? Maybe a handful of leads if you’re lucky? With each of those leads costing you 10K+. And nothing if you aren’t so lucky!

For each 10K you spend, you could have an expert write a piece of content that could be part of a year-long educational campaign that could be used to generate real leads through sign-up downloads, webinar sign-ups, follow-up conversations and downloads (when someone contacts you to learn more, and thanks you for educating them vs. just shouting marketing soundbites at them), etc. For the 80K you would spend on a glitzy event, you could get 4 custom pieces of content, 4 webinars, and a year-long educationally oriented marketing campaign that you’d be thanked for.

Practitioner Organization: It will cost you 7.5K to 10K for each senior lead, director, and CPO you send to a 3-day event. You’re probably budgeting 25K to 30K to send a small team. And what are you getting for it? A bunch of high-level presentations on various topics by a bunch of people you don’t know, usually not much different than the presentations you saw two years ago on the same topics by different people you don’t know, which aren’t deep enough to teach you anything (except re-emphasize important areas you need to drill down deep on).

A bunch of discussions with random vendors, many of whom won’t be relevant to you, while you completely miss the chance to talk to those vendors who would be because there was no way you could get to them all and without good pre-vetting and education, you were just rolling the bones and engaging randomly (or, if you were hungry, with whatever vendor rep offered you the most tantalizing dinner option).

For that same 25K, you could have an expert from a niche mid-sized consultancy come in and give your team a 1 to 2-day course on a specific problem or area of relevance — i.e. what do modern e-Procurement systems do, how do you select the right one, and who are five vendors that are commonly used by your peers; what regulatory changes are coming in global e-Invoicing requirements over the next two years, and what will we have to do to keep up; how can we address carbon accounting reporting requirements while embedding better carbon management into our supplier development and supply change management; etc. And let me repeat — your whole team, not just 3 people where 2 of them are responsible for multiple areas (or everything) and have no time to train anyone else or oversee the process, program, or technology that needs to be put in place.

The only people who get their money’s worth at these events are:

1. Consultants who don’t sponsor, don’t stay at the overpriced event hotel, but just go and spend their entire time talking to vendors they don’t know (to engage with them firsthand on fact-finding and relationship building) and Directors/CPOs (to find out what the common themes are that they should market too) and come away with verified/renewed focus and new options to sell to their clients.

2. The Organizers who get the fame and the fortune (as they collect a cut of all money coming in).

But does this mean all events are, or have to be, bad?

No. An event would be very worthwhile if:

  • it didn’t try to be everything to everyone (and ended up being nothing to anyone),
  • instead focussed on a market niche (market size – geography – problem or process), and
  • kept the size down, the balance appropriate, and the value up.

Let’s dive into this.

Focus

For an event to be truly valuable, it has to address a relevant problem or technology for a (similar) group of organizations which have a similar problem or need. By this, I typically mean market size (small to mid-market, mid-market and above, large mid-market through global enterprise), region(s) with similar market dynamics (North America and Western Europe, Central and South America, India, China, etc.), and a focus on a technology (Procure to Pay, e-Procurement, I2P/AP, Supplier Management, Direct Sourcing, etc.) or problem (Carbon Regulation and Accounting, Data Management and Predictive Analytics, etc.). This allows organizations to self select as being interested, or needing insight, in this problem or technology, vendors with appropriate technology to come forward (and be vetted by the event organizers as relevant), and the event to ensure value will be received by all attendees — practitioners will get relevant talks and panels (as all the sessions will be appropriately oriented) as well as a chance to learn about solution providers who provide solutions relevant to their peers (and possibly them) and vendors will know that the practitioners are actually interested in the type of technology they are offering, and leads will be real (and more plentiful).

Balance

There should be considerably more practitioners than vendor reps. At least 2 to 1, and preferably 3 to 1. The event organizer can limit vendor registrations based on attendees, as well as the number of reps a vendor can send. This helps the vendors (by ensuring there are more than enough practitioners to go around, which means they will spend more time talking to practitioners than each other) as well as the practitioners (by not only ensuring they aren’t overloaded by irrelevant vendors but by ensuring they have a lot of peers to talk to for insights as well).

Size

A good event is big enough to ensure there is enough variety in vendors and in peers to talk to, but not so big you get lost in a sea of people. In the doctor‘s view, it’s 50 to 500-ish, depending on whether:

  • you’re narrowly focused on one specific (emerging) problem and want to only talk to senior peers: in which case you’re looking for a round table event, 50-ish senior practitioners, 3 to 5 vendors with 2 reps each, and a single large meeting room at a hotel
  • you’re focused on acquiring or upgrading a best-of-breed module to solve a small set of problems such as data analytics, supplier management, or strategic sourcing: then you will want 200 to 300 people, 5 to 10 vendors with 2-3 reps each, a lot of common sessions, and a few breakout sessions on particular problem types or advanced solution features (predictive demand modelling, sourcing optimization, supplier development program implementation, etc.)
  • you’re interested in upgrading your sourcing or procurement capability across the board and/or learning about the current advancements, best practices, and issues in the space in which case you’d want a slightly larger event focused on your market size and geography, with maybe two to three dozen vendors with 3-4 reps each, 500+ (but < 1000) participants, and multiple tracks … still capable of being held at a large, but affordable, hotel

And since all of these events are smaller, it shouldn’t cost an attendee more than 5K in the worst case for 3 days of valuable information and vendor discovery or a vendor more than 20K for a low-cost booth and valuable leads (+ rep costs). And while this is still a sizeable amount of coin for a smaller procurement organization to send 3 people or a vendor to have a both and send 3 reps, it’s still less than half the cost of a bigger event for both parties for considerably more value.

This was the direction I’d hope a certain new event organizer would take when it started a few years ago as a smaller event focused on smaller players and newer tech, and the direction I’m hoping the next new event org will take. Not one big event that tries to be everything to everyone and instead ends up being just a sea of noise, but a series of smaller events across the Americas and Europe that are focused, give more affordable opportunities to more smaller, relevant players, and much more value to the attendees.

Will it happen? History has repeatedly shown it won’t, but if it ever does, the value will be unparalleled to all the attendees.

 

For those curious, the doctor‘s original response to Gaurav on “better events” was the following:

Instead of oversized, overpriced, events pretending to be everything to everyone we need smaller, more focused events that focus on particular problems or technologies for particular markets for (dedicated) Senior Leads, Directors and CPOs only.

T: Sourcing for the Mid-Market in North America and Western Europe
(Primarily EN business, similar processes)
T: e-Procurement for Mid-Market and Large Enterprise in Central and South America
(lots of e-Invoicing Regs, all Spanish or Portuguese)
T: Supply Chain Logistics for India and China
(where we’re still buying everything from)
P: Carbon Management for the modern LMM or Large enterprise in the Americas or Europe
(relevant supply management, carbon accounting, etc. tech for enterprises facing regulations)
P: Procurement Maturity for the growing Mid-Market
(focusing on maturity models, emerging best practices, and new category / knowledge management tech)

Then, when a CPO spends her 5K to go and discuss, she’s focused on a relevant topic, learning something, and seeing demos from vendors with appropriately focused solutions on one or more aspects of the problem (vetted by the organizer). Everything is relevant. For 10K, she can take the lead or director who will be charged with the program and system implementation. Money well spent.

And if she’s in a larger organization, she can take that 10K she saved and invest it in a startup fund, which could also be present at the event, that is collecting funds to seed various startups in S2P+ disciplines and direct that the money be invested in a startup focused on tech to solve her biggest problem. (And this foreshadows an upcoming article.)