Without question, TradingPartners represents the purest execution to date of the original FreeMarkets business model. And now, with Ariba exiting the sourcing services business entirely, the firm can lay claim to offering an approach that even the original provider in the sector has gotten out of. Yet despite the focus of its model, TradingPartners is about to enter a period of transition -- and not entirely by choice. From a services perspective, Spend Matters research suggests that companies are looking for greater flexibility than just reverse auctions and competitive RFXs from integrated sourcing solutions providers. As an example, AT Kearney Procurement Solutions has built a growing and significant practice in the area of optimization and advanced sourcing analysis leveraging more powerful software capabilities than what it originally developed on its own before selling this business to Siemens/UGS. Others, like Denali, have grown sourcing services practices in part through creative extensions of staff augmentation and related models.
Despite the challenges that TradingPartners faces as it looks to where it wants -- and must -- go next, it's clear that Mark brings what looks to be an ideal background to the fold. I had a quick chat with Mark over the weekend and look forward to sharing his vision of where TradingPartners will go in future posts on the subject. It's clear to me that he knows enough about procurement, global sourcing and trade to be dangerous, but is a useful outsider with both an operational and strategic background to bring to bear. With TradingPartners as the heir apparent to a legacy business model that can still generate material value to customers -- albeit one that potentially brings with it a smaller inheritance each year as customers migrate to new sourcing fields and embrace broader strategies and approaches -- it's also clear to me that Mark will have his role cut out for him, regardless of whether you look upon his appointment as a growth CEO coming in to take the company to a new level or as a turnaround leader trying to iron out some of the kinks that were holding the organization back.
- Jason Busch