Emptoris Version 8 and the 10% Solution (An Empower 2009 Commentary)

Posted on October 2, 2009


In June I had the opportunity to talk with AMR’s Mickey North-Rizza on the PI Window on Business Show.

Titled “Taking Measure of an Acquisition,” the main focus of the segment was to review what was then the recent Emptoris acquisition of Click Commerce.  A move I might add that had many industry pundits scratching their heads.  I of course was not amongst those that questioned the move.  In fact, I supported the decision and in the process ruffled a few feathers.

One fellow blogger even went so far as to chastise my inability to tow the proverbial line by attempting to view the acquisition outside of the traditional framework of accepted logic – a logic I might add that has in large part contributed to the 85% rate of e-procurement initiative failures.

Specifically, and speaking about the Emptoris decision to acquire Click Commerce, the blogger wrote and I quote:

“Let me ask you: have you ever been through one (or more than one), have you purchased software on behalf of a company considering working with an acquired company (or the company doing the acquisition), and/or have you witnessed the amount of work required to integrate organizational efforts?”

He then went on to suggest the that “moving into new territory like this, if history is any guide, it is highly likely that this will be a distraction from the core in the areas that got them (re Emptoris) to where they are today.  This is important – and not something that you should dismiss hiding behind smart sounding rhetoric (which ironically will lead to anything but smart decisions in the field).”

He then closed with the following admonishment, “But you cannot evaluate an offering or a move like this in a philosophical box, however polished and well-argued you can make the argument. I thought more highly of you before this. Please don’t go down the path of becoming the Fenimore Cooper of procurement blogs.”

While I still do not know who or what is a Fenimore Cooper, although I do not think that it was meant as a compliment given the general tone of his prose, if said blogger knew then what we all know now perhaps the reaction to the Emptoris move would have been different.

But that is one of the challenges of using a traditional lens to view events such as the acquisition of Click Commerce during a period of dynamic change in the general market.  You often lose your point of reference.

In all fairness to the dissenting blogger, towards whom I carry no ill will simply because disagreement or conflict as we discovered in a recent PI Window on Business segment “can be healthy and beneficial to growth,” his perspective was likely shaped in the enterprise era of procurement solutions.  A mindset as much as a period of time where the driving objective behind acquisitions was assimilation versus collaborative adaptability.

At 50 of course, I am probably as familiar if not more so with the former enterprise assimilation mindset as much as I am with the present day model.

In the past issues regarding “service partner cultivation and tangential marketing strategies” held a degree of validity.  However, in today’s Metaprise-centric world, such terms fall largely on deaf ears as they have no practical value from an execution standpoint.  At the end of the day, execution by way of delivering the expected tangible savings (which has been historically absent from the majority of initiatives) is ultimately achieved through the coordination of  unique capabilities derived from operational insight and understanding.

In essence the operational architecture of the client takes precedence over the organizational hierarchy of the vendor that is supposedly designed to service said client’s needs.

Of course this brings us back to the Mickey North Rizza interview and her comment that “AMR helps companies” decide on an automation strategy based on the following formula; 50% organization, 40% process and 10% technology.  On this point I emphatically agree with Mickey.

Based on my countless discussions with Emptoris, including my recent interview with the company’s Senior Vice President, Product Management and Marketing Kevin Potts, whether intentionally or not they have and are continuing to build their organization and client solutions suite based on a similar formula of insight and expertise.

This is the reason why I understood the logic behind the Click Commerce acquisition, the choice of their new CEO, and of course the unique elements of the version 8 release.  Focusing on critical areas such as better risk management and global integration reminds me of the quarterback in football who throws the ball to where the receiver is going to be rather than where the receiver is today.  And like the receiver coming to the line of scrimmage at the start of the play knowing where he needs to be to catch the ball, some of the things that Emptoris has done in the past were based on knowing where they had to be today to service their clients’ needs.

While I have not yet received the authorization to release the names of the company’s impressive and rapidly growing international client base, once this is made public you will know that the receiver has caught the ball, and scored a touchdown.

As for my fellow blogger, and the answer to his question “have I ever been involved with an acquisition?”  Here is the link to the incendiary article including both his comment and my response.  Good reading from start to finish.

Note: While I was not able to travel to the Empower 2009 Conference to be there in person, my interaction with Emptoris’ senior management team this past week starting with the analyst review last Friday and subsequent interview with Kevin Potts on the PI Window on Business Show on September 29th was both interesting and insightful.

In case you missed it, you can access the “Live” version of the broadcast through the On-Demand Player below:

Vodpod videos no longer available.

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