More than 6 years after my Dangerous Myths post, Jason Busch admits that he kind of got it wrong (Part 1 of 2) by Jon Hansen

“I spent five years at FreeMarkets before launching Spend Matters and covering the market as a journalist and analyst . . . I’m a guilty party in terms of reverse auctions and foisting them on suppliers . . . I am also a proponent of them as well, but as you’ll see in our thinking we’ve moved on . . .”

Jason Busch, Leaving Reverse Auctions in the Dust

As I began to listen to the just published audio of Jason Busch’s presentation Leaving Reverse Auctions in the Dust, I could not help but feel a gradual sense of satisfaction.  This emerging feeling was tied to the fact that perhaps a truth that had remained hidden beneath the analyst babble of years past was finally emerging.  To what truth is Jon referring you are probably asking yourself?

To start those individuals, who after spending years with a particular vendor such as a FreeMarkets or Ariba, may not necessarily possess the required objectivity in terms of effectively covering the market as a journalist/analyst.  I am not suggesting that this is my position in all circumstances but, and as demonstrated by my post regarding Gartner’s waning creditability, one might reasonably question the length of the arm in terms of the relationship between a new “former employee” analyst and their previous employer.

This isn’t just personal opinion or wanton musing.  The historic data to which I had referred many times in countless posts including part 7 of my Dangerous Supply Chain Myths series speaks volumes:

Between 2001 and 2005 75 to 85% of all e-procurement initiatives failed to achieve the promised results in terms of savings.  Accentuated by high profile misses such as the automotive industry’s Covisint marketplace and the Veterans Health Administration’s 7 year, $650 million JD Edwards-Oracle misadventure, a dramatic change in thinking was bound to occur.

Back in May 2007, it seemed that I was a lone voice in the procurement world in that I had no affiliation with the big players at the time.  This meant that there were not any relationship encumbrances that prevented me from pointing out the fact that the emperor had no cloths.  More specifically, that the eProcurement solutions being championed in the supposed mainstream didn’t deliver on their promise.

Fast forward to today, and Jason’s comment that we will see in his thinking that he has moved on, speaks to the point I had made in the same 2007 post;

At the heart of this change is a growing realization of a fundamental truth that process and not technology is the driving force behind a successful e-procurement initiative.  Specifically, it is through process understanding and refinement combined with the ability for technology to adapt to the way in which the real world operates that credible targets are established and ultimately met.

For those of you who may not be familiar with the concepts presented in the 7-Part Dangerous Supply Chain Myths series, towards which it  now appears Jason may be leaning, the series was based on my review of a ISM, CAPS and A.T. Kearney Report that was originally released in May 2007.

Considered to be a breakthrough assessment of the purchasing industry at the time, I felt that there were several gaps in the study.  Given what I have heard in Jason’s Leaving Reverse Auctions in the Dust webinar, these gaps may have actually been wider than I had originally thought.

In Part 2 I will examine more closely the present day Busch presentation and provide my take on this evolutionary change in thinking to which Jason had referred.

In the meantime, I will leave you with this one question . . . can you trust a journalist’s or analyst’s opinion and recommendations if they have previously been employed by a solutions vendor such as an Oracle?

I wonder how the VHA and the countless other organizations who experienced similar results might respond?

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