In most of my posts so far on Ariba's analyst day, I've tried to offer objective commentary over subjective analysis. But this post is an opportunity for me to indulge in the latter (which is far more fun). So where to begin? There's a number of lasting impressions I came away with from the day. So in no particular order, I'll rattle them off.
First, I believe Ariba needs to invest as much in marketing and promoting their services capabilities as they have in productizing and commercializing them. I consider myself very close to Ariba's services given that I spent five years at FreeMarkets, but I had no idea how far they had come from a services commercialization perspective. And if I'm out of the loop, 99.9999% of the market is too. Along the same lines, Ariba needs to better promote its specific consulting and services capabilities in hot areas (like commodity hedging strategy and global sourcing beyond China).
Second, given the breadth of Ariba's sourcing and supply chain advisory capabilities and the rising overall services market -- just look at the growth of the boutiques in the space and the hiring spree the Big 5 are on in the sector -- I believe that Ariba has come up short from a sales execution perspective, despite the growth their services teams are realizing. In my view, the challenge here is their large sales organization which does not know how to sell what can often be rather complicated services in new client opportunities. Because once Ariba introduces one of their more seasoned services professionals in a customer situation, they often perform much better selling over time (not surprising since consulting is a relationship game). But it's the initial sales piece which I believe must be hurting them. So what's my solution? I'd hire a bunch of more seasoned business developers on the services front apart from the enterprise sales team and I would give them the upside of partners at consulting firms.
Third, I think Ariba did a great job promoting the category and domain knowledge within their services team. Despite a brain drain that was sure to occur following the merger / acquisition, they've managed to keep a number of commodity experts and bring in others where needed (I know this point will generate controversy with some alums, but I must say that Ariba did a good job highlighting the knowledge of their category analysts during their analyst day).
Fourth, I believe Ariba is missing out on a big opportunity to further imbed and sell category and supply markets content within their applications. I know this is coming in the future, but the failure to monetize the real-time market knowledge in the heads of their supply markets experts in software perplexes me as much today as it did when I joined FreeMarkets in 1999. This could -- and should -- be a HUGE competitive advantage for Ariba. I'll leave my specific product and content suggestions for a one-on-one conversation with them, but my head is literally spinning on what they could be doing here.
Fifth, and last for this post, I believe that Ariba's services delivery model -- and their deployment of lean to streamline and improve services delivery -- should serve as an example for all large global procurement organizations. Transitioning to a shared services approach was not easy for FreeMarkets -- trust me, I was there when this was going on -- but the rewards it brought in increased margins, faster project cycle times, higher quality and consistency, and better results have more than made it worth the effort. As more and more companies use FreeMarkets -- and now Ariba's -- shared services sourcing organization as a model for their own, I suspect we'll see the gap widen between results top performers and more typical organizations achieve. And the better such world class organizations will be able to slot in services providers like Ariba exactly where they need them because of identified gaps and episodic needs rather than letting consultants live on site, hawking their wares and smarts continuously.