Strategy Matters - Sometimes

In one of his Friday Rants over on SpendMatters, Jason Busch talks to "What's Holding Ariba Back" in the area of sourcing services. Jason argues, supported by a number of current and past Ariba employees, that one of the most vexing challenges faced by the company as it seeks increased market penetration of its services offerings is a need for the company "to be more deliberate and explicit about what the (sourcing) services strategy is". Now, before ranting a little bit myself on this subject I would make the point that the challenges faced by Ariba in this regard are not unique to the Sunnyvale outfit. Whether you are an Ariba, an Accenture, an ICG or a boutique the sourcing services market (nay in fact most of the consulting services market) is a prickly beast to engage these days, a far cry from the fading light of the last century when a powerpoint and a smile would often have the buyer's pen gliding across your arrangement letter. A decade on we're all learning that not only will customers sometimes refuse to come to what you've built but when they do saunter over to take a look at the purty invention shining under your shingle they often as not want to dismantle it and take only the parts that catch their eye.

So to Ariba. Obviously I am not privy to Ariba's current internal methodologies for incorporating the voice of the customer but from my vantage point the core competency that served the company so well in the early Ariba Buyer days has been conspicuously absent in the go-to-market approach for their sourcing services. I remember being in the audience at the Fairmont Hotel in 1998 when Chevron spoke at one of Ariba's early customer summits about having selected Buyer based on its having been designed "from the ground up by the customer". Chevron talked about Ariba visiting their offices and listening intently to what they wanted from an automated purchasing system. They told of Ariba re-visiting them repeatedly to double-check what they heard. It was no surprise that in the ensuing bakeoffs with CommerceOne and others it was the Ariba product that looked closest to what Chevron actually needed. The rest is B2B history.

If they're not doing it already Ariba - no wait, Ariba and the rest of us PSPs - should sit our folks in front of the procurement practitioner community and, well, listen. We might find that procurement departments actually have an inconveniently messy patchwork of sourcing services support needs that are excitingly vast here ("please take on responsibility for sourcing all of my IT spend"), frustrating uneven there ("we have a few gaps you can fill"), and definitively unappealing in many other places ("we actually break out MRO into 17 sub-categories, perhaps you could take these 3"). We may also find that one procurement department's messy patchwork looks nothing like that of another. All this will likely mean that there is in fact no all-singing all-dancing sourcing services model that will fit a single customer living in the real world today. And perhaps that's the true crux of the matter, that the search for a deliberate and explicit strategy for meeting a customer's sourcing needs is fruitless. It turns out that customers aren't the least bit interested in your latest services delivery model, they just want value. And it's a pain in the royal neck I know, but the sourcing value needs of different companies are like cabbage patch dolls - there ain't a single one of them that looks the same. This means that a service provider's strategy must morph from customer to customer with the only important question being "do I have the right strategy for this particular customer?".

Until the day that Ariba and every other sourcing services provider can be content with not knowing the answer until the customer has provided it the sourcing services world will be a very frustrating place for those who build.