Spend Management: Question Marks for 2006 (Part 1)

Instead of writing a Spend Management predictions list for the New Year, I thought it would be more fun to create a list of open-ended items that I have for 2006. Many of these items are "question marks" where the verdict is still out. These items are worth paying attention to because they offer insight into overall trends, adoption, and market direction. Today, I'll tackle a few of these. Check back later this week for additional question marks as well.

My first big question mark for 2006 is how Rearden Commerce will do. As many of you know, I'm a big fan of Rearden. But whether Rearden succeeds in a major way (i.e., breaks-out from the sector, creating a new market of their own) or whether they remain just another Spend Management vendor is still very much an open ended question. I'm pulling for them, and I'll continue to support them here at Spend Matters, but we'll see how the market treats them. If Rearden does manage to break-out, it will be a great sign that executives are beginning to view the benefits of Spend Management as moving beyond just cost savings and compliance.

Another question I have for 2006 is how the analyst landscape will shake out. 2005 proved to be a great year for analyst progress with the sector. Late in 2004, analyst coverage of the sector was drying up. With the exception of Aberdeen’s consistent and thorough Spend Management analysis, things did not look good. But throughout 2005, both AMR Research and Forrester ramped up their coverage significantly. Will this trend continue in 2006? Will Gartner and IDC get serious about covering Spend Management as well? Will Aberdeen and AMR maintain their pole position? Stay tuned, and we'll find out!

My last 2006 question mark for today is whether Spend Management professional services will continue to rocket. In 2005, many consulting firms ramped up their recruiting efforts significantly, and dozens of boutiques grew as well. Whether this growth continues will be dependent on the level and amount of Spend Management talent that procurement organizations decide to bring in-house. Many are recruiting talent aggressively and are paying significantly more (scroll down to read the post) than in the past. Another component of this question mark centers of the evolution of the procurement outsourcing market, but I'll leave that for another post, as it's a huge topic to consider by itself.

Jason Busch

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