Supplier Diversity Gets Nasty: Why You Should Ignore the Pettiness (Part 1)

As Spend Matters readers are no doubt quite familiar, the supplier diversity data enrichment and software sector entered a new era in December when one of the last remaining two independent vendors, AECsoft, was snapped up by SciQuest (see posts: here, here and here). Within days, CVM Solutions, a rival independent vendor, circulated an e-mail to AECsoft customers and others with the title: "AECsoft No Longer Supplier Diversity." The header text that followed suggested that "The Supplier Diversity Community will no longer need to put up with old technology and poor service [because] SciQuest announced yesterday that it has signed a definitive agreement to acquire AECsoft." Next, CVM claimed "Some simple facts tell the story: AEC was just acquired by a publicly traded company and thus they are no longer minority owned. If you read the press release, it says they are going to be focused on strategic source-to-settle procurement, and NOT supplier diversity."

I reached out to AECSoft's Tom Ren to get his take on the note and he suggested, "Obviously CVM is playing dirty again by distorting SciQuest's press release. Certainly we will continue to provide best in class Supplier Diversity and Supplier Management solutions for all industries." He further opined, "AECsoft [is] merging with a public traded company to offer Supplier Diversity and Supplier Management [at] a much larger scale, with 10 times more resources and influence."

While I will leave it to you to interpret whether or not you agree with CVM's certainly aggressive -- and I would argue disingenuous -- marketing tactic, I've come to believe this sort of stuff is par for the course in the software industry. But there are a number of reasons why what CVM claims should not matter one bit when it comes to deciding what supplier diversity provider to work with (which, in my opinion, should largely amount to a cost- and simplicity-driven decision at this point, given that at least four providers offer the same -- I would argue commodity -- supplier diversity data right now).

I'll examine why tomorrow in Part 2 of this post.

- Jason Busch