Want to profit from ‘spend management’ at no cost?

‘Spend management’ is today’s trendier term for e-procurement and I guess ‘supplier management’. And now, specialist Ariba has now joined forces with Big Blue to offer just about everything you could want in exactly that specifically for the mid market – and apparently at zero cost. What they’re offering is the full spread of e-procurement support software, web exchange links, content management and the rest, alongside IBM’s infrastructure (pSeries and xSeries as well as DB2 and so forth) and global consultancy and implementation services – and those of its partners. In fact partnership is one of the operative words here. IBM and Ariba say they see their deals will involve long term relationships with manufacturing clients. And that includes financing, which will be designed to take the pain out of signing on by only starting to cost you “when value is released,” as Watton puts it. This is about shared risk as well as expertise and infrastructure, the proposition being that IBM and Ariba consultants work with you to find savings opportunities, and then as those are achieved, match the price so that there’s an early “neutral cash flow”. Why now? With the market in the big users league drying up, the software and services vendors’ attention is turning to the mid market. Ariba’s own research shows 90% of large companies doing something already, but only 63% of the mid range and 40% of SMEs. John Watton, Ariba’s marketing director, believes that 37% of firms on average in the mid market are not getting good value from their suppliers – probably because they’re to big to be on the case, but too small to have much clout. And as he says, “The economic climate is poor … so all companies need to manage their spend better.” What he doesn’t say is that competition from the main line ERP enterprise software vendors is turning up the heat, and if Ariba wants to rebuild the kind of growth rates it initially enjoyed it rather behoves the firm to be able to fight fire with proverbial fire.