The enterprise application bad guys

The enterprise application bad guys

Posted by Pete Loughlin in e-invoicing, e-Procurement, e-Procurement Software, Electronic Invoicing, Procurement Best Practices, Procurement Process, Procurement Software, Purchase to Pay, Purchasing Process, Social Media 26 Oct 2011

You can tell who the good guy is – he wears the white cowboy hat. But enterprise application vendors don’t wear hats so how do you tell them apart?

Purchasing Insight logoIt’s true – the bad guys always wore black and the hero had the best hat – in the westerns in any case. But that was when we were young (or before we were born), and real life isn’t like that. Or is it?

Emotional reactions can distort views about application vendors. The e-invoicing space is a perfect example. Some of the players seem like the good guys. The interoperables. The start ups. The underdogs. Others seem like the bad guys. The “closed” networks. The big, bad, global bullies? Booo!

But this isn’t Saturday morning cinema – this is business. What’s going on and what do we do about it?

The fallacy of free

I want to address a myth with a worn stereotype. It’s worn but it works. Think about the bearded, sandal wearing Unix engineer – loves open systems, file-sharing for free and he’s using his beloved iPhone. An iPhone! The least open and one of the least “free” bits of tech you can imagine – but it hits the spot. Take anything away from him – his sandals, his operating system – but don’t touch the freekin’ phone!

“Free” and “openness” is an ideal. It often works and there’s nothing wrong with them as ideals but the ideal itself doesn’t always address the business requirement. Sometime, something that doesn’t fit the ideal is much better. Interoperabiltiy is a great ideal but if it doesn’t meet your business needs it useless. And in many cases it doesn’t. OB10 for example, despite offering interoperability, claim they process more electronic invoices on their network in a couple of hours than they handle interoperable invoices in a year. For many of their customers,  OB10 is the iPhone – sure you can jailbreak it but it works just fine out of the box.

The impact of social media in manipulating popular opinion

Social media fans the flames of popular opinion and  it can dramatically both opinion and behavior. It’s not always a good thing. While the revolutions in north Africa are generally seen (by the western world in any case) as a good things, the riots in the UK during the summer of 2011 were a manifestation of how social media can be used destructively.

However it’s used, there’s no doubt about its power to influence popular opinion and it is no less effective in the B2B world as it is in the ordinary society. Can social media influence the enterprise application industry? Look at the perception of the enterprise application market. Compare the good guys and bad guys and see who is the most social media savvy. Where would Oracle be on the spectrum of good to bad? Where would Coupa, the cloud based e-procurement people be? What about Ariba and Tradeshift? It’s very subjective but does it tell you anything?

These are only perceptions but perception is reality and buyers and vendors alike need to mange it. Now, more than ever, vendors need to constantly assess market perception and manage it. I think there’s a direct correlation between a compay’s market perception and their use of social media in the same way that for FMCG manufacturers, their image is directly correlated to their advertising activity. Just because we’re all grown ups in the B2B world, doesn’t mean we don’t respond emotionally.

Buyers should assess the market through their own business lens

So what is the lesson for buying organizations? To purchasing pros, this is like procurement 101 but many buying decisions are made, or if not made, heavily influenced, by non-professionals. To make a good procurement decision objectivity is critical. Market hype and emotional bias distort the purchasing process. From a purchasing perspective, it’s critical to ensure that objectivity is maintained. It’s important to establish a clear set of detailed business requirements before engaging with third parties. Assess the relative merits of each vendor through your own business lens and look at demonstrable and proven functionality.

In other words look at the functional match to your unique business requirements – and don’t look at the color of their hat.

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