I was commenting on an old blog entry from JP Massin’s blog earlier which got me thinking. He looks at Alexa rankings for various e-sourcing providers to see which are the most popular of the sites. Even the top player (Ariba, no surprises there) languishes at about the 200,000 mark.
I like to keep things simple. And in its simplest terms, a business is about buying something at a low price and selling it a higher price. OK, in reality there’s a bit more to it than that – you usually have to do some magic to your inputs to be able to turn them into something profitable.
Buying + Magic + Selling = A viable business
Now, everyone knows (or thinks they know) about what sales people do. They make people like them, they earn lots of money and immediately piss it up a very high wall. (Check out Boiler Room if you don’t believe me).
Then the workers of the magic are equally more or less understood, or at least respected. The guys who develop the products, who deliver the service, whatever.
But the purchasing guys … they’re just treated as an afterthought.
Have a look at these Alexa rankings:
You can argue about how meaningful/gameable Alexa rankings are anyway, and you can argue about comparing a completely On Demand player with a traditional software provider. But this doesn’t detract from the fact that the broad picture is pretty clear. Lots more people go to Salesforce.com than to the other two companies I’ve picked. The real point is that Ariba – which we tend to consider the 800lb gorilla of procurement software – barely even registers in the grand scheme of things.
A few possible interpretations:
- Procurement is a backwater and always will be
- No-one has yet come up with procurement’s killer app
- Procurement and technology really don’t mix
I’m betting on option 2. Any other ideas?