Spend Management Software -- Now is the Time to Buy
But this last point says nothing for the potentially ideal timing for getting a point or packaged suite solution at a highly attractive price point given the desire among vendors to close the year strong. From a software negotiation standpoint, one of the best techniques to getting a good deal is universal across virtually everything you source. And that's the importance of price, feature and company benchmarking as part of the RFP and negotiation process. Above all, know your supply market. And at the same time, as my long-time colleague Pierre Mitchell suggested to me recently, apply the same sourcing techniques to Spend Management technology as you would to anything else.
For example, just as you would not recommend that the business sole source a large contract to a single supplier that had inferior capabilities relative to the market benchmarks in some of the areas covered, it does not make sense to apply different logic to software. After all, you would not recommend applying supplier rationalization approaches to categories where the end-result would be an inferior solution -- either from a total cost, value creation or risk perspective. So if you take anything away from this post, remember the following: buy what you need, buy at the right price (and don't put off investments to 2009 if you can get a better deal in Q4), and above all, buy from the collective set of vendors who can fulfill your business requirements, which will most likely include -- but not be limited to -- your ERP providers.
- Jason Busch
I saw the headline, and figured you were out shilling yet again. But then I read it and you do have a point. End of year sales commissions can't be overlooked. They do drive behavior and price.
Without revealing too much, I used to be with a provider of spend management software and now I am in a position with a potential user of spend management software. I could probably tip my current company to the position of purchasing spend management software if I wanted to.
And you know what? I don't want to. Because I'm not convinced. We ate our own dog food at the place I used to work, and my downstream use of spend management software required me to log into that nightmare to purchase office supplies and business cards that in the past I probably would have just sent an email to somebody to do.
Who gained from that? Did my company save a billion cause I was buying the most cost effective stapler? How did that work out when netted against my salary/time and all the other people that had to log in and approve my ballpoint pen purchase? I'll just leave that as a hanging question...
It will be interesting to see if this recession we are heading into helps spend management software. It at least has the potential message to work. I'll be watching closely, and laughing my ass off at the companies that thinking approving staple purchases online is going to pull them out of recession. I'll probably just resort to telling the IT guys to knock off all the spending.
Assuming your company isn't going bankrupt, they'll probably be spending some money next year. If so, your hurting suppliers will want a piece of that and it seems to me you'll be in a better position to source than when the getting was good for your suppliers. I won't even re-hash how payment management follows similar logic.