Vendors and consultants who have worked with me in the Spend Management world know my passion for introducing external content into internal company processes. Ever since my early days at FreeMarkets, I've been a cheerleader for the power of external information to help companies make better decisions -- from up-front sourcing strategies to global supplier identification to supply risk mitigation and management. And as I've written about before, we had a golden opportunity at FreeMarkets to capitalize on this, but like many other service and software providers that tried their hand at commercializing content, we came up short in creating a separate revenue generating content-specific business model. But not for lack of effort and thought, that's for sure!
In the consulting and software worlds, the lure of the billable hour or high margin application deals has traditionally trumped a content- or information-based sale. But perhaps things are changing. The potential for relationships between companies like Procuri and AT Kearney Procurement solutions to leverage expert services content -- and On Demand services access -- within the context and process of a software solution is high indeed. Ariba also has a golden opportunity here as well (I'll talk more about Ariba's potential in the content sector in a series of different posts).
Getting back to the topic, at Empower, AT Kearney Procurement Solutions and Procuri announced a partnership where the two would team up on the content and services side. Under this arrangement, AT Kearney Procurement Solutions will offer training, event-driven support, and other services to Procuri customers. But as part of this agreement, Procurement Solutions will also offer expert content to Procuri customers such as RFP and sourcing strategy templates, supply market condition updates, and supplier search capabilities. Obviously, this content is available for a fee -- it's not free -- but I'd wager the price points are in the five figure range versus the six.
On the mainstage, Procuri demoed the type of Procurement Solutions content that will be made available. Aside from the templates, much of it appears to be in Office or PDF format rather than integrated into the application via a newsfeed or RSS fashion. Given the value of the supply markets content -- and its use as background material to guide strategy more than anything else -- this is acceptable, although a bit clunky, at least as they called it up on the screen during the conference. Still, I view the integration of this type of strategic decision support content into Spend Management applications as the future.
Granted this is just a start, but imagine a future where a category manager is prompted by a content alert to open up his supply base for a given sourcing project to a new region because of current underlying commodity price differentials in raw materials input (i.e., the price of steel is trading at a discount of .96x to 1x in various markets). Or perhaps a proactive alert might suggest that a multi-round sealed bid with optimization might yield better results that a direct competitive negotiation approach like a reverse auction given current market conditions for a specific category. With current, updated supply markets information, this type of "push-based" decision support will be possible -- and hopefully sooner than we all think.
Regarding the quality of AT Kearney Procurement Solution's content, I cannot speak to how often the category or supply market updates are refreshed. For any customer considering the purchase of it, this is a key question to ask, as commodity and regional sourcing environments can change on a dime, and last quarter's information might lead a company down the wrong decision path.