An Evolving Procurement Solutions Landscape: Services & Consulting Lessons From FreeMarkets Alumni Jason Busch - September 3, 2013 7:43 AM | Categories: Procurement Commentary, Solution Providers | Tags: L1, Process and Best Practice Last week, I attended the FreeMarkets alumni event in Pittsburgh (see two quick essays on some of the learnings from this event here and here). While many FreeMarkets alumni have left the procurement profession entirely, many remain, including a good number that have not gone “in house” in procurement—typically in larger Fortune 500 organizations. But what is most interesting to me is how a substantial number of folks are still working on the services front, and most important, how dramatically broader – and potentially confusing – the procurement services market is today. See the following Spend Matters Plus/PRO research briefs for further context: The Booming Procurement Services Market: Backdrop and Challenges Procurement Services Market Landscape: The Continuum of Procurement Services Procurement Services Market Landscape: Market Drivers and Trends How to Buy Procurement Research & Advisory: Part 1 – The Landscape How to Buy Procurement Research & Advisory Services: Part 2 – Buying Strategies Sourcing Managed Services: Not Consulting, Not Outsourcing When it comes to staying in the professional services world, FreeMarkets alumni have headed to a wide range of consulting and managed services firms. These include Accenture, AT Kearney, BravoSolution, Enrich, Transpac Access, Tenzing, and Denali. Many of these firms have dramatically evolved their offerings and approach in the past decade since the 2004 sale of FreeMarkets to Ariba. For example, a number of these firms, in addition to traditional consultancy services, now offer managed services (which, as we note in an explanatory brief on the topic, is not consulting, staffing, or true business process outsourcing, but something new entirely). However, perhaps the most interesting trend of all among these players is the blurring of traditional consultancy models with new offerings – and using the consulting relationships to “upsell” a range of new services. These can include the following: End-to-end sourcing suites (in select cases) Procurement/spend analytics Vendor management/supplier management services Market and category intelligence services Highly customized and enhanced hosting of third-party applications (e.g., eProcurement) Supplier quality/performance management solutions Highly specific category-centric solutions from pre-sourcing through to monitoring and administration (e.g., logistics, packaging) Later in this series, I’ll explore on a high level what some of these providers are focusing on in their attempts to bring differentiated solutions to clients. But even more interesting is how these firms are typically quite different from their peers that have always focused on hybrid solutions or software (as opposed to consulting). Here’s what makes many of them different, including incorrect assumptions by potential customers: Their typical sales model for these new types of services is still largely (but not always) driven out of a senior-level, consulting-centric type of relationship rather than a traditional software model. Examples include thought leadership, PR/communications, analyst relations, demand generation, inside sales/direct sales, and channel sales. Generally speaking, these new “hybrid” services firms are not as good as software companies at the sales and marketing of non-traditional services/solutions (with some exceptions, mind you). For practitioners, this means that unless you’re a client already, it might be easy to miss what they have and how they can help! Consulting firms do not always hold non-billable (or partner) staff to the same level of regard as software firms. This can sometimes manifest in a lower level of experience in this area based on lower pay scales and job potential (again, contributing to the fact that companies may not have heard of a perfect solution for their needs in this area because they’re not being targeted in the strategic manner of other solution firms). Companies may overlook these providers as options for highly targeted needs/requirements because of the mistaken perspective that everything they do is expensive, with a day-rate clock ticking behind the scenes (which is not always true!) In the coming weeks, we’ll continue to explore some of the capabilities of the firms that FreeMarkets alumni have gone to, highlighting the variation and capability that makes up the broader procurement services landscape. Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.