Friday Rant: Why Services Procurement is Full of Piss and Vinegar

When I originally found myself in the procurement sector on the vendor/consulting provider side in the late nineties, I quickly observed that I was surrounded by similar sorts of type A males (and type A "fe-males", for that matter). My peer group at FreeMarkets and other firms were full of bravado and our competitive spirit and passion was evident not only in how we approached our jobs and serviced clients, but how we trash talked the competition as well. Our mouths were foul and venomous, our blood pressure was high and our rhetoric was like a drippy faucet, unable to ever fully shut off. I admit to having been one of the chief instigators, but I assure you, I was not alone. Many of our early customers, as well, possessed a similar spirit and drive and were willing to mark their trails with land mines to get the desired effect.

But my how things changed. Over the course of a few years, starting with the stock market crash of 2001, the energy slowly drained away from the sector. Granted, adoption rates rose, individual companies saved more money than the entire non-oil related GDP of countries like Saudi Arabia and Iran, but the levels of piss and vinegar that defined the early years -- especially on the provider side -- declined precipitously. The very competitive lifeblood that cascaded throughout our temperments slowed to a trickle. We became more polished, less lewd. And we began to lack the spontaneity and gung ho rabble-rousing spirit that woke us up everyday to confront our spending and our enemies anew. But all things come in cycles -- Spend Management being one of them. And when it comes to the services spend arena specifically, I'm beginning to see signs not only of life, but the fire breathing rhetoric and competitive fervor of old. It's a good thing in my book.

In over a dozen conversations I've had with different providers (both software and services companies) in the services spend arena of late, I'd say at least half regressed into competitive banter about how the competition is screwing up or undeserving of given market segments. Providers are angry. Providers are fired up. Providers want to win at all cost, not only defeating their opposition, but taking them down in the process. I love it! The competitive spirit is alive. Practitioners themselves are also stoked about the opportunity at hand. They're more collaborative than the providers and see how they can accomplish more with carrots than sticks internally, but the spirit is most certainly there. Even though the savings opportunities from services procurement might not be as great as the initial rounds of e-sourcing back in the day, the same enthusiasm appears to have re-surfaced.

But what are the reasons for this enthusiasm. Three things are contributing to the cause as I see it. For one, I'd argue that the sheer size of the services opportunity -- and the fact that so much services spend has gone largely unmanaged for so long -- is a major contributor to the equation. Perhaps second, I'd argue that services procurement is a less mature market overall and early-stage areas such as this tend to attract types that are more passionate about change than other areas. These types of individuals also tend to view what they do more on a personal level, treating work as more than just a job. Third, I'd suggest that the sector is attracting new blood. Both on the vendor and practitioner side, folks getting into services spend management aren't just old school procurement types that you sometimes need to kick to make sure the old corpse is still alive. Some come from IT, others HR. Still more come from diverse areas of the business. And the procurement types getting involved aren't just of the run-of-the-mill introvert sort. They're the kind of managers who realize the need to engage the business in a discussion around services procurement versus simply slamming in a system or mandating a process. In short, they're collaborative types, who understand the need to engage the business and to get fired up.

So there you have it. The competitive spirit and missionary enthusiasm is alive and well in the rather large services corner of the Spend Management universe. But how can we best take advantage of the zeal and fervor? Because clearly, if history is any indication, it won't last forever. I'll leave this question up to the Spend Matters community to chime in on.

Jason Busch

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