EDITOR’S NOTE: As a follow-up to the previous post, Is Consolidation And ProcureTech Acquisition A Win For The Practitioner Customer?, what can or should a Procurement Practitioner customer do to mitigate what is clearly out of their control? What about analysts? What should they do?
What Procurement Practitioners Should Do
Strategic Defense Mechanisms
1. Embrace the “Independence Premium” Strategy Given that independent companies like Zycus maintain higher Hansen Fit Scores and customer focus, procurement practitioners should actively seek out and support independent solution providers. Pay the premium for independence – it’s cheaper than the hidden costs of acquisition disruption.
2. Build Vendor Portfolio Diversification Never put all your procurement technology eggs in one basket. Maintain relationships with 2-3 smaller, independent providers across different modules rather than betting everything on a single comprehensive suite that could be acquired and dismantled.
3. Create “Acquisition Escape Clauses” When negotiating contracts, explicitly include provisions that allow contract termination without penalty if the vendor gets acquired. Build in data portability requirements and ensure you maintain ownership of your process configurations and historical data.
4. Develop Internal Capabilities in Parallel Don’t become completely dependent on any external solution. Maintain some internal capability to handle critical processes manually or through simple tools if your primary vendor disappears overnight (like Nipendo customers experienced).
Relationship Management Tactics
5. Stay Close to the Founding Vision Maintain direct relationships with the original founders and key personnel of your chosen solutions. When these people leave post-acquisition, that’s your early warning signal to start planning exit strategies.
6. Join User Communities Early and Deep Become an influential voice in user communities. Companies considering acquisition often survey major customers – your vocal opposition to acquisition can sometimes influence decisions or at least ensure better transition terms.
7. Implement the “Canary in the Coal Mine” Approach Deploy new solutions in limited, non-critical areas first. This allows you to test vendor stability and commitment before rolling out enterprise-wide. If acquisition happens, the damage is contained.
What Procurement Analysts Should Do
Reframe Analysis Methodology
1. Track Ownership Stability as a Core Metric Traditional analyst frameworks focus on features and market share. The Hansen methodology suggests analysts should weight ownership independence heavily in their evaluations. Create explicit “acquisition risk” scores for every vendor assessment.
2. Develop “Customer Betrayal Indices” Create metrics that track how acquisitions impact early customers specifically. Monitor implementation success rates, customer satisfaction scores, and retention rates pre- and post-acquisition to quantify the real impact on practitioners.
3. Follow the Founders Track where original leadership teams go after acquisitions. Their departure patterns often predict how well customer interests will be preserved. Analyze correlations between leadership retention and customer satisfaction outcomes.
Industry Advocacy Role
4. Champion the Independent Player Narrative Use analyst platforms to actively promote awareness of the independence premium. Counter the “bigger is better” narrative that drives destructive consolidation by highlighting the customer costs of acquisition-driven disruption.
5. Create Acquisition Impact Reporting Develop standardized frameworks for tracking and reporting what actually happens to customers post-acquisition. Make this a regular part of industry analysis rather than treating acquisitions as purely positive “growth” stories.
6. Build Early Warning Systems Develop intelligence networks that can predict acquisition targets before deals are announced. Give procurement practitioners advance warning when their chosen vendors are “in play” so they can prepare contingency plans.
Collaborative Resistance Strategies
For Both Groups
7. Form “Customer Protection Coalitions” Large procurement customers should band together to negotiate collective protection clauses. When vendors know they’ll lose major customers if they get acquired and change direction, it creates acquisition deterrent effects.
8. Support “Customer Bill of Rights” Initiatives Push for industry standards that require acquirers to maintain service levels and customer focus for minimum periods (e.g., 3-5 years) post-acquisition. Create legal frameworks that protect customer interests during vendor transitions.
9. Invest in Open Standards and Interoperability Support technology standards that prevent vendor lock-in. The easier it is to move data and processes between platforms, the less power acquirers have to exploit trapped customers.
The “Anti-Acquisition” Investment Strategy
10. Create Customer-Owned Solutions Consider consortium-based development where multiple large procurement organizations jointly fund and own solution development. This prevents external acquisition and ensures customer interests remain paramount.
11. Support B-Corporation and Benefit Corporation Structures Advocate for vendors to adopt legal structures that legally prevent them from prioritizing profits over customer outcomes, making them less attractive acquisition targets or requiring acquirers to maintain customer focus.
The Harsh Reality Check
What’s Actually Controllable
The truth is that procurement practitioners and analysts have limited control over the vendor acquisition cycle. However, they can:
- Choose differently: Favor independence over market leadership
- Contract smarter: Build in protection mechanisms
- Diversify risk: Avoid single-vendor dependency
- Plan for disruption: Always have contingency strategies
What Requires Industry-Wide Change
The Real Solution: The procurement technology industry needs structural reforms that prioritize long-term customer outcomes over short-term acquisition profits. This requires collective action from customers, analysts, and industry bodies to create market conditions that reward customer focus over financial engineering.
Bottom Line: Defensive Procurement
Procurement practitioners must adopt a fundamentally defensive posture – assume that any successful vendor will eventually be acquired and plan accordingly. The goal isn’t to prevent acquisitions (which is impossible) but to minimize the damage when they inevitably happen.
For analysts, the responsibility is even greater: stop treating acquisitions as automatically positive developments and start measuring their real impact on the practitioners these solutions are supposed to serve. The Nipendo case should serve as a wake-up call that analyst enthusiasm for “strategic acquisitions” often translates into customer abandonment in practice.
The industry needs to evolve beyond celebrating consolidation and start protecting the innovation ecosystem that actually serves procurement practitioners effectively.
30
BONUS COVERAGE – WHY IT’S TIME TO GO BACK TO ANOTHER POST
Procurement Insights
Is it time for procurement practitioners to take the wheel of ProcureTech innovation?
Posted on August 29, 2025
0
EDITOR’S NOTE: As a follow-up to the previous post, Is Consolidation And ProcureTech Acquisition A Win For The Practitioner Customer?, what can or should a Procurement Practitioner customer do to mitigate what is clearly out of their control? What about analysts? What should they do?
What Procurement Practitioners Should Do
Strategic Defense Mechanisms
1. Embrace the “Independence Premium” Strategy Given that independent companies like Zycus maintain higher Hansen Fit Scores and customer focus, procurement practitioners should actively seek out and support independent solution providers. Pay the premium for independence – it’s cheaper than the hidden costs of acquisition disruption.
2. Build Vendor Portfolio Diversification Never put all your procurement technology eggs in one basket. Maintain relationships with 2-3 smaller, independent providers across different modules rather than betting everything on a single comprehensive suite that could be acquired and dismantled.
3. Create “Acquisition Escape Clauses” When negotiating contracts, explicitly include provisions that allow contract termination without penalty if the vendor gets acquired. Build in data portability requirements and ensure you maintain ownership of your process configurations and historical data.
4. Develop Internal Capabilities in Parallel Don’t become completely dependent on any external solution. Maintain some internal capability to handle critical processes manually or through simple tools if your primary vendor disappears overnight (like Nipendo customers experienced).
Relationship Management Tactics
5. Stay Close to the Founding Vision Maintain direct relationships with the original founders and key personnel of your chosen solutions. When these people leave post-acquisition, that’s your early warning signal to start planning exit strategies.
6. Join User Communities Early and Deep Become an influential voice in user communities. Companies considering acquisition often survey major customers – your vocal opposition to acquisition can sometimes influence decisions or at least ensure better transition terms.
7. Implement the “Canary in the Coal Mine” Approach Deploy new solutions in limited, non-critical areas first. This allows you to test vendor stability and commitment before rolling out enterprise-wide. If acquisition happens, the damage is contained.
What Procurement Analysts Should Do
Reframe Analysis Methodology
1. Track Ownership Stability as a Core Metric Traditional analyst frameworks focus on features and market share. The Hansen methodology suggests analysts should weight ownership independence heavily in their evaluations. Create explicit “acquisition risk” scores for every vendor assessment.
2. Develop “Customer Betrayal Indices” Create metrics that track how acquisitions impact early customers specifically. Monitor implementation success rates, customer satisfaction scores, and retention rates pre- and post-acquisition to quantify the real impact on practitioners.
3. Follow the Founders Track where original leadership teams go after acquisitions. Their departure patterns often predict how well customer interests will be preserved. Analyze correlations between leadership retention and customer satisfaction outcomes.
Industry Advocacy Role
4. Champion the Independent Player Narrative Use analyst platforms to actively promote awareness of the independence premium. Counter the “bigger is better” narrative that drives destructive consolidation by highlighting the customer costs of acquisition-driven disruption.
5. Create Acquisition Impact Reporting Develop standardized frameworks for tracking and reporting what actually happens to customers post-acquisition. Make this a regular part of industry analysis rather than treating acquisitions as purely positive “growth” stories.
6. Build Early Warning Systems Develop intelligence networks that can predict acquisition targets before deals are announced. Give procurement practitioners advance warning when their chosen vendors are “in play” so they can prepare contingency plans.
Collaborative Resistance Strategies
For Both Groups
7. Form “Customer Protection Coalitions” Large procurement customers should band together to negotiate collective protection clauses. When vendors know they’ll lose major customers if they get acquired and change direction, it creates acquisition deterrent effects.
8. Support “Customer Bill of Rights” Initiatives Push for industry standards that require acquirers to maintain service levels and customer focus for minimum periods (e.g., 3-5 years) post-acquisition. Create legal frameworks that protect customer interests during vendor transitions.
9. Invest in Open Standards and Interoperability Support technology standards that prevent vendor lock-in. The easier it is to move data and processes between platforms, the less power acquirers have to exploit trapped customers.
The “Anti-Acquisition” Investment Strategy
10. Create Customer-Owned Solutions Consider consortium-based development where multiple large procurement organizations jointly fund and own solution development. This prevents external acquisition and ensures customer interests remain paramount.
11. Support B-Corporation and Benefit Corporation Structures Advocate for vendors to adopt legal structures that legally prevent them from prioritizing profits over customer outcomes, making them less attractive acquisition targets or requiring acquirers to maintain customer focus.
The Harsh Reality Check
What’s Actually Controllable
The truth is that procurement practitioners and analysts have limited control over the vendor acquisition cycle. However, they can:
What Requires Industry-Wide Change
The Real Solution: The procurement technology industry needs structural reforms that prioritize long-term customer outcomes over short-term acquisition profits. This requires collective action from customers, analysts, and industry bodies to create market conditions that reward customer focus over financial engineering.
Bottom Line: Defensive Procurement
Procurement practitioners must adopt a fundamentally defensive posture – assume that any successful vendor will eventually be acquired and plan accordingly. The goal isn’t to prevent acquisitions (which is impossible) but to minimize the damage when they inevitably happen.
For analysts, the responsibility is even greater: stop treating acquisitions as automatically positive developments and start measuring their real impact on the practitioners these solutions are supposed to serve. The Nipendo case should serve as a wake-up call that analyst enthusiasm for “strategic acquisitions” often translates into customer abandonment in practice.
The industry needs to evolve beyond celebrating consolidation and start protecting the innovation ecosystem that actually serves procurement practitioners effectively.
30
BONUS COVERAGE – WHY IT’S TIME TO GO BACK TO ANOTHER POST
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