As reader interest continues to shift from technical specifications and Magic Quadrant ratings, to focus instead on real performance indicators such as assessing the people and values behind a company, covering our industry requires an entirely different set of skills than it did in the past.
Given the increasing level of comfort and competency that today’s Generation Next has with regard to technology, analysis of vendor solutions is not really that important. Let’s face it, and with the exception of a few bells and whistles, all solutions are for the most part, the same. Sure there are variations, but at the end of the day – at least with the true cloud-based platforms, you can’t really go wrong.
What this means is that there is a vast gray area that requires a deeper and more time-consuming analysis. One in which you are not likely to get the kind of cooperation from vendors that you normally would have gotten in the past.
These points were driven home to me the other day, when I received two very interesting e-mails from an organization.
The following are excerpts from their second e-mail. I have of course left out the actual names of both the sender and the vendors to whom they referred. The reason I did this is that this e-mail could easily apply to any client situation, and vendor:
As you have more insight into the situation than I feel I do, as well as more experience in the field, I would like to pick your brain . . . A few years ago, current staff convinced our management that an automated Contracting program would streamline our processes. We recently cancelled an agreement with our existing vendor. It would seem that we spent almost 3 years and a LOT of money on this program that was never stable and never worked for us. Now that we are looking for a new program, for bids/RFIs and Contracts, I feel that I have something to prove to our upper management.
After reviewing 10 different programs, we have narrowed it down to Vendor 1 and Vendor 2. We are leaning more towards Vendor 1’s package, but we’re weary about this situation . . . and possible ethical issues with both companies.
What does the above tell you?
To me it speaks to the fact that we are entering an entirely new realm of assessing potential vendors that is not based on a finite features, functions and benefits overview.
What we are really looking for are partners, as opposed to technology. This means that the character of the people behind the organizations with whom we are looking to work, carries an increasing amount of weight in terms of our decision-making process.
It also means that the way we cover the industry requires a commitment to go where traditional analysts and bloggers have rarely gone, if at all . . . into the hearts and minds of the companies they cover. This takes a special kind of resolve, and an even greater level of commitment.
Industry coverage: Digging deeper
The vendor community has to change as well.
Vendors need to look beyond Wall Street and stock prices, deftly drafted marketing prose, and a “let’s win the business first, and worry about making it work later” mindset.
Instead, they have to consider their values and true capabilities to meet relational user needs, and do so in a manner that aligns with the interests and values of the client.
In short, and as the above e-mail suggests, vendors can have the biggest and baddest technology on the market – they can even have the best pricing model. But if their business practices are questionable, they may still find themselves on the outside looking in.
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Procurement Insights 
piblogger
January 21, 2016
Reblogged this on Procurement Insights EU Edition and commented:
Editor’s Note: Really, how important is technology?
Kelly Barner
January 21, 2016
Great points, Jon. The irony about this is that for years now we have talked about ‘software as a service’ or SaaS. And while what that really means is gaining access to technology on a subscription basis rather than through making an acquisition, in practice it needs to mean more like real service delivery. The fact that procurement can access SaaS technology in a relatively turnkey fashion also means we can disengage with minimal disruption to the business. The best bet for solution providers is to actually start acting like service providers. When you establish working relationships with your clients (users) you give them a reason to remain loyal that extends beyond the hold that any technology can have.
When the focus shifts to building customer loyalty, it becomes more important that the team in place be effective, positive, and energetic. If there are personnel or leadership problems at a service provider, customers will know it – even without direct or firsthand knowledge of the issues. Anyone who has tried to work with a company that is experiencing internal trouble knows what I am referring to. You just can’t pretend to be a well-oiled machine.
None of this is easy. Although it presents a different kind of challenge, putting together a good service offering is just as complex as designing well performing technology – especially if you expect to do either elegantly. And the opportunity for differentiation that it creates will benefit good providers as well as the procurement user community as a whole.
piblogger
January 21, 2016
Well said Kelly . . . very well said.
Nick @ Market Dojo
January 25, 2016
Very interesting article. As a SaaS provider, I couldn’t agree more with Kelly’s comment as well. Perception is that the acronym should be spelt Saas, rather than saaS, in other words it’s more about software than service. However this is so not the case. The majority of our corporate wins have been on the service basis and we receive emails almost daily thanking us for our help with xyz. The software is just there to tick along and do its job as a commodity.
As Jon says, these days the functionality is by and large the same, what really distinguishes us from the competition is the people. Energetic, motivated, passionate about procurement, be it speaking to a junior buyer or a CPO. Our competitors spend more on their marketing each year than we’ve possibly spent in entirety over 6 years! However marketing can be used to cover up vulnerability, mask the problems, conceal mistakes, to give that outwardly appearance of being the ‘well-oiled machine’.
Once you get to know the people and how the business is run, you see the true colours. In the SaaS game it’s all about renewal rates as essentially each month/year you’ve got to win your client all over again. Year 1 might be about the software, whereas Year 2 is about the people (relationship). We’re in a privileged position to still be working with our very first client, something we’re very immensely proud about and that hopefully speaks volumes about us as a company to work with.