Having attended Oracle’s customer event a couple of weeks ago, I wasn’t sure I’d be able to make it to Emptoris’s Empower event this year, but I'm glad I was able to attend. The quality of the external speakers, the access to Emptoris execs, the content mix (high-level procurement trends and implementation best practices), the plentiful opportunities to chat with customers, partners, and employees — all these made it an extremely valuable couple of days.
A key event theme was the urgent need for procurement leaders to improve their risk monitoring and mitigation processes. For instance, according to Deloitte Consulting’s 2011 CPO survey, nearly 60% of respondents believe their risk exposure is higher than a year ago. Emptoris’s President & CEO Patrick Quirk explained his company’s response, with an ambitious roadmap to convert the acquired Xcitec product (now called Emptoris Supplier Lifecycle Management) into a comprehensive supplier risk and performance management suite (SRPM), in line with our description of this category: FAQs About Supplier Risk And Performance Management Software.
I handle many inquiry calls from clients asking for help negotiating with large suppliers, and often they claim the supplier is a strategic partner. I’ve noticed that many clients use that term, but when I ask them what it actually means in practice, I get varying responses. So Forrester recently surveyed over 150 sourcing and vendor management (SVM) professionals to ask them what they expect to get from strategic partners, and what they offer in return. I was bit disappointed with the results. For instance, while 68% said they would always expect partners to give them the best possible discount, only 6% said they would always make the partner their sole source for specific technology categories.
What’s wrong with this picture? Well, to quote Godfather 2, when explaining Hyman Roth’s longevity, Johnnie Ola says, “He always made money for his partners.” That concept doesn’t seem to apply in the technology world. On the one hand, buyers complain about vendors’ unfair policies (see my recent report Buyers Should Reject Unfair Licensing Rules) and transactional sales approach. Yet OTOH they want to squeeze their partners’ margins while still expecting them to sell their wares site-by-site and product-by-product around their enterprise. As one senior software executive told me the other day, “Sure, I’ll waive my usual policies for partners, but only if they let me off the huge cost of supporting individual, small product buying decisions.”
Do you have a plan for how your team will add value to your business’ objectives in 2012? I don’t mean serving user requirements or meeting their expectations. I mean helping them achieve their end goals. The chances are good that your business executives have some hot priorities for next year that include initiatives like grow faster than their key competitors, bring new products to market, acquire or divest a business unit, serve customers better, and be more profitable.
And whether they succeed or fail at those initiatives could depend on what sourcing and vendor management does. Pick the wrong suppliers, and the initiative doesn’t get implemented properly. Sign a bad deal, and the ROI your executives were counting on evaporates. Manage the supplier relationship ineffectively, and the initiative stalls.
That’s a lot of pressure for sourcing and vendor management (SVM) professionals. It also explains why all of the SVM pros I know are smart and tough – SVM is not the place for wimps.
As the leader of Forrester’s SVM Council, which will meet at Forrester’s Sourcing & Vendor Management Forum next month, I get to see first-hand how senior SVM pros take that responsibility seriously and how they work every day to bring more value to their organizations. We recently as a group spent time discussing 2012 strategic priorities. While there was a fair amount of detail, here are the top-level priorities for SVM executives in 2012:
As soon as you think you understand software companies’ policies on virtualization, a new problem appears that makes you tear your hair out and scratch your now-bald head. This month’s conundrum is whether or not VMware’s ThinApp product breaches your Microsoft Windows license agreement:
However, Microsoft, via its knowledge base, claims that “Running multiple versions of Windows Internet Explorer, or portions of Windows Internet Explorer, on a single instance of Windows is an unlicensed and unsupported solution.” http://support.microsoft.com/kb/2020599/en-us#top
VMware doesn’t warn customers that ThinApp could cause them Microsoft licensing problems, but neither does it claim that it is legal. It merely advises customers to check with Microsoft.