Palambridge – Innovative Model for Firm Entering Procurement Consulting Marketplace

There have been a couple of interesting developments in the consulting and professional services world in the past two weeks - one very much UK-based, the other very international.

Let’s start today with the international, and the launch of Palambridge.  This is being driven by Philip Ideson, who runs the Art of Procurement website which has produced a series of very good podcasts over the last year or so, featuring interviews with procurement luminaries. His partner in the venture is Kelly Barner, well known particularly in the US as the owner / director of Buyers Meeting Point.

Ideson, along with Kelly Barner and others have put together a group of consulting and solution provider firms, some very small, some a little bigger, but all genuinely deep experts in some aspect of the procurement and supply chain world. So, participants include our friends at Future Purchasing, leaders in Category Management; Market Dojo, Bristol-based eSourcing tech providers; and as an example of a US-based participant, the excellent Kate Vitasek and Vested. She is a recognised expert and thought leader in outsourcing theory and practice, and there are also folk we don’t know but sound interesting like “the Innovation Garage”.

So the firms can offer strategy, capability development, tools and execution support across a pretty wide range of procurement requirements. The interesting concept in terms of business model is that clients can buy “credits” and those credits are then used towards buying outcome-based services from one or more of the firms involved. But, just to be clear, the transaction is with Palambridge, not with the individual firm. There are also opportunities for more conventional project-based fee models too.

At first sight, we’re impressed by the calibre of the people involved. Before Art of Procurement, Ideson worked in consulting, managed services and outsourced procurement service provision, so he is no novice when it comes to this sort of business. And the other firms, to our knowledge, are all strong in their own fields.

However, there will be more detail needed around the business model for exactly how clients engage and work with Palambridge. Just as importantly, on the supplier side, how work allocation, costs and revenues are managed is key. We’ve seen other consortia-type venture fail because of arguments over “who gets what” – so, for example, how much of the revenue earned under the Palambridge banner by Future Purchasing if they deliver a project will that firm get, and how much will be retained to cover overarching Palambridge central costs, business development and so on?

We certainly wish the venture well. Procurement consulting options for buyers ranges from the top-tier firms like McKinsey with their great intellectual prowess and prices to match through the giant audit/consulting firms to the specialists like Future Purchasing, 4C, Efficio, State of Flux and the like.

But if Palambridge really can bring these best-of-breed players together in a convenient manner for client organisations, then this could be a worthwhile addition to the choice available. And in a further article shortly, we’ll have more from the horse’s mouth, following our recent chat with Ideson.

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