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Is The Future About Services?

May 19, 2009

SpendMatters has featured an interesting commentary on the acquisition by Emptoris of Click Commerce and their stated aim of improving support to the services market.

I am not a great judge of software functionality, and therefore I will not comment specifically about the merits or otherwise of Emptoris’ products and this acquisition, but it does seem to me that the move has business logic. Our world continues to move more and more towards a services-based economy. This trend shows no sign of lessening. It is being driven by the view that we no longer want to buy ‘things’, but instead want to buy ‘outcomes’.

Everything about our society is pointing to a world where there will be greater accountability. We are demanding more honesty. And this means that companies (as well as politicians, business leaders and professionals everywhere) will be expected to make responsible commitments and to honor them.

If we are going to be held more to account, the implication is also that the relationship needs to last for the lifetime of the offering. Hence not only is structuring of the deal important, but oversight of performance moves up several notches (hence the concerns of the Obama administration and many other central governments over procurement and contract management capability).

Since no one can afford a massive increase in headcount, and robust skills in the area of services contracting are in short supply, Emptoris’ move is both logical and in tune with market needs. Having the right software to manage a portfolio of services contracts and relationships will become of growing concern to businesses worldwide. And I tend to agree with Emptoris VP of Marketing Kevin Potts when he suggests that no one has yet filled this space with a flexible and scaleable product (or perhaps service!).

Who knows, we may one day even see the light come on in more Procurement groups and they will break down this false barrier between ‘direct’ and ‘indirect’ so that acquisition decisions truly do start to focus on value.

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