Empowering Decisions Excerpts from the Determine Blog | Page 1
Professional Services & Support: The Canaries in the M&A Coal Mine Having been in procurement for a while, I’ve seen a lot of changes take place over time. Procurement M&A — Mergers, acquisitions, rebrandings, etc. are the commercial equivalent of births, deaths, and weddings. They are the facts of life. That said, it is one thing to observe a change in the market, and it is another thing entirely to experience it firsthand. Having been in procurement for a while, I’ve seen a lot of changes take place over time. Procurement M&A — Mergers, acquisitions, rebrandings, etc. are the commercial equivalent of births, deaths, and weddings. They are the facts of life. That said, it is one thing to observe a change in the market, and it is another thing entirely to experience it firsthand. I’ve been on a team responsible for handling procurement technology when our spend analysis provider was acquired by a larger firm. I’ve also been a consultant at a solution provider when we acquired a couple of point solutions and integrated them into our product ‘suite’.
How to separate “reliable” from “rhetoric.” If you now find yourself in the position of watching your procurement solution provider being bought, as is the case with Jaggaer’s recent acquisition of BravoSolution, you may be wondering where to look for reliable information that can serve as a guidepost for your own response and future plans. Plenty has already been written about this acquisition already, and there will be more to come as the details have time to play themselves out across the industry. Read everything you can, but don’t forget to apply a grain of salt. Don’t be too excited or too upset – at least not at first. The hyped aftermath of an acquisition is no time for hasty decisions. That said, all good procurement professionals know that it is critical (not to mention strategic) to maximize the number of qualified alternatives available to us for key suppliers. That holds true for the spend we bring under management for stakeholders as well as for the resources committed on our own behalf. If you really want to get the inside line on how things are going as an acquisition progresses, here is my advice: carefully watch and listen to the professional services and support teams at your provider. They are your canaries in the coal mine.
Staff turnover may be a sign of early onset dysfunction. Back in the days before electronic air quality sensors, miners used to carry canaries down into the coal mine with them. That way if the levels of carbon monoxide approached a dangerous level, the canary would show the effects first. That way, the miners would have enough time to make their escape before they fell victim to the noxious gas.
Empowering Decisions Excerpts from the Determine Blog | Page 2
The members of a professional services team (consulting, training, implementation, project management, etc.) and support or help desk team are in a unique position. They have not developed the technology, but they are its face to customers. In order to keep projects on track, they will directly interact with customers through the acquisition announcement and as well as the months that follow. In all likelihood, they will be highly professional and do their best to keep things moving ahead with as little disruption as possible, but it is still important to watch for any changes that may serve as indicators of how things are going on at the company. Is your usual point of contact happy? Sad? Stressed? Distracted? MISSING? The answer to this question serves as an indicator of morale and stability at the acquired company, as well as your ability to have a meaningful and sustained relationship with them.
Sticking it out, or out the door? Professional Services: These are usually knowledge-driven consultants with either deep process or category expertise. They are highly employable, and can easily find a new position in the industry (especially if they are willing to travel) should they see a brighter future elsewhere. They are your first-round canaries. If the best and brightest chose the path less traveled, you know you are in for a long period of rocky changes and institutional knowledge loss at your provider. Although the new company will be able to support your technical requirements and may have equally talented consultants, they won’t be familiar with your company or sourcing/supplier history. Support: More tactical than their professional services counterparts, the support team (or help desk) is nonetheless an indicator of process stability and response timing. If they seem lost in response to a request for help, chances are some critical frameworks are missing internally. These are the kinds of details that cause frustration from a help desk but can lead to chaos in development. The devil is always in the details, and the help desk’s readiness to lead customers through a transition will be far more than other detail-oriented structures. Their ability to access information from other points in the company (response time) is an indication of how well the different teams are working together and how effective the new hybrid leadership team is in facilitating the actual consolidation. Back to our historical canary for a moment. They played a critical role in the mines and saved many lives, but there was limited upside to their job and the risk was high. Fortunately for professional services and support ‘canaries’, the physical danger is low, but that does not mean they are having a good time through the acquisition period. You may decide to stay with your acquired provider, or evaluate alternatives and make a switch, but keep in mind that none of what has happened is the canary’s fault. While you are still working with them, be as patient and compassionate as possible. After all, they may save you in the end. There has definitely been a lot of procurement and source-to-pay industry provider consolidation news as of late. As a customer whose provider is in transition, it’s the perfect time to do what Kelly Barner says above – educate yourself on the alternatives. If you’d like to see what your next source-to-pay or contract management cloud platform should perform like, schedule a personalized demonstration of the Determine Cloud Platform today.
Determine, Inc. (NASDAQ: DTRM) is a leading global provider of SaaS Source-to-pay and Enterprise Contract Lifecycle Management (ECLM) Solu ons. The Determine Cloud Pla orm provides procurement, legal and finance professionals analy cs of their supplier, contract and financial performance. Our technologies empower customers to drive new revenue, iden fy savings, improve compliance and mi gate risk. The Determine Cloud Pla orm seamlessly integrates with major ERP or third-party systems such as SAP, Oracle, Sage, QAD and Microso . Modular solu on can be configured to add more as needed to provide addi onal value beyond spend management. Our unified master database and business process approach empower users at every level to make more informed and smarter decisions.