Over the past 24 hours on Spend Matters, we’ve had the start of what promises to be extensive coverage of the largest services procurement software acquisition in history: SAP’s acquisition of Fieldglass. See links to our earlier coverage under Related Articles. While much of our analysis will ultimately be centered on the solution, the technical side of product innovation and capability of the two combined providers, and the implications for customers and the broader market, there’s another, ironically “human” element to the deal that makes it very different than SAP’s acquisition of Ariba.
Simply put: contingent and services procurement professionals network and talk to each other (in contrast to the typical old-school procurement type).
If you’ve ever been to a contingent staffing event (e.g., SIA or a vendor event), you know that they’re lively affairs. Attendees tend to be much more social and interactive than those at typical procurement conferences. They’re also far keener to share information and trade best practices, even amongst competitors (e.g., rival banks or manufacturers). And this interaction carries through to sharing information and ideas outside of network events as well. Indeed, contingent workforce management and services procurement represent a very small world indeed.
It will be critical for SAP to realize that the relative lack of choice provided to customers (e.g., “buy this cloud P2P thing, don’t upgrade Buyer or SRM”) in the wake of the Ariba acquisition will not fly with the much tighter knit services procurement practitioner community, which would be up in arms over being told what they can and cannot have. The flip side of this, of course, is that small and large staffing firms alike have already rolled over and played dead (largely) when it comes to accepting the supplier-paid fee model of the MSP and VMS market.
The bottom line: lest anyone at SAP forget, it will be critical to remember that those in the contingent workforce sector tend to be far more interactive with each other and word will travel like wildfire based on their actions. In contrast to Ariba, this should have very significant implications for how SAP defines integrated roadmaps, prioritizes the potential for “choice” and flexibility in models, and generally treats customers (buyers and suppliers mind you!) after the acquisition close. The tiniest details and customer engagement will matter here more than ever in contrast to Ariba customers, many of whom have quietly complained and then done nothing more.
Or said another way, dusting off my college Latin, Minima Maxima Sunt (the smallest things matter most!)