A few days ago, I waxed eloquent about content and catalog management. Today, we continue the analysis.
In my discussions with experts on the matter, one of the consistent points that kept coming up was the ratio of services to software revenue. Roughly, the numbers we heard are that for every dollar a user spends on deploying a content and catalog management technology, they spend two to four dollars on services to make the software work.
What are the services they’re buying? The majority of catalog and content management services fall into the following categories: configuration (especially in the case of product information management systems), initial on-boarding, classification / data cleansing, and integration. While there's significant revenue on the services side, day rates tend to be less than for strategic sourcing (closer to IT consulting rates than strategy consulting rates). However, it's not like you can toss bodies at the problem and get results. Industry expertise, vertical knowledge, and context are all critical. The analysts and consultants that I spoke with suggested that it's critical to ensure that your services provider brings expertise outside of just the technology. Offshore labor (e.g., India) is a possibility. Focus on knowledge and context, not geography.
One of the other findings of the research was that catalog and content management has fallen off the research agenda at analyst firms. I learned from talking with analysts that while firms like AMR Research, Aberdeen, and Forrester have covered the sector in the past -- and still have analysts who know quite a bit about it -- they often don’t get enough inquiries to warrant significant coverage today. .
Perhaps this is in part because companies are moving away from looking at catalog and content management as technology. As one expert observer whom I spoke with put it: "The issue is you can’t look at catalogs as one sector. You need to decompose it. What problem are you solving? You must go at it with a purchasing process lens." When looked at from this perspective, catalog and content management has not gone away, but has been picked up by other areas. It's now an integral part of eProcurement, master data management, spend analysis and data cleansing, among other areas.
So don’t limit your horizons. The catalog and content management challenge remains. And it's even bigger than before. But think beyond basic eProcurement enablement (and indirect, catalog and MRO) when tackling it to solve broader Spend Management challenges.