Big Blue Tips Its Spend Management Cards — Again

I can't tell Spend Matters readers how often I've told clients not to worry about IBM getting into the core procurement and supply chain applications market. Given that they've built such a great franchise around knitting Spend Management together through process consulting, outsourcing, and on the ground services capabilities in China and throughout Asia, why would they want to rock the boat by going after a consolidating, hyper-competitive market? Well, good question, but it looks like the allure of software margins and the growth of the overall Spend Management segment are getting the better of Big Blue's services focused culture. And they're proving my advice wrong. Just this week, IBM plunged one step closer to picking up a full-blown Spend Management suite provider when they announced their acquisition of MRO Software, an asset manager management applications provider which touches on procurement as well. This acquisition comes on top of IBM's previous acquisition of Viacore, a supply chain "plumber", and their release of rudimentary contract management capability earlier in the year.

What's important not to overlook here is that IBM is not only focused on building a software capability in the Spend Management arena. They've also invested heavily in procurement BPO capability and building out a global direct materials management offering based on their existing infrastructure and resources. In other words, it would appear that IBM is looking to become a one-stop Spend Management shop that can deliver enabling software, services, and global capabilities. What do you think is next for IBM in the Spend Management arena? Methinks that we might see some even bigger moves from IBM in the coming year given the significant activity and announcements in recent months.

Jason Busch

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