I want to tell you right up front that I do not actually go looking to shoot holes into the concepts or ideas that are presented by the fellow pundits within the purchasing and supply chain world. This is largely due to the fact that being the writer/editor of six blogs (and growing), the number of stories and breadth of topics that flash across my radar screen on a daily basis keeps me relatively busy. That and of course what will soon be the release of my third book “Tasers, Abortion and Parenting: Behind the Curtain of Policing America,” which is a collaborative effort with TV and radio’s Cop Doc Richard Weinblatt, means that something has to almost immediately tweak my curiosity.
Of course there are the occasional stories such as my recent posts in which Procurement Insights was the first blog (or for that matter publication of any kind) to break the Ontario Education Collaborative Marketplace or “OECM” story regarding their decision to punt Ariba and eat the $20 million they had invested to date. (NOTE: here are the links to the September 1st post “OECM Punts Ariba, Taking a $20 Million Dollar Hit In The Process?” and, the September 3rd post “$20 Million Ariba Fiasco Gains Crossover Appeal and Market Attention.”)
And it is these most recent stories that caused Jason Busch’s Spend Matters post from today – which with other blog and publication links comes to me by way of Eqentia Semantic Portals, to literally jump of the proverbial page.
In what is the second of a 2-Part Series in which the erstwhile supply chain blogger fancifully discusses the merits of “Getting More From Ariba’s Underlying Assets” through amongst other things “breaking up” the company “to create greater value for shareholders, customers and partners,” one cannot help but draw a comparison with Busch’s ideas and those of the fiddling Nero obliviously playing while a fire consumed Rome.
Even putting aside for the moment seriously flawed opinions such as his statement that “Despite a growing, healthy SaaS business model that has significant strategic intent behind it (e.g., charge buyers up-front and annually (with up-sell potential) while generating additional, high margin revenue from suppliers down the road)” – high margin revenue from suppliers down the road . . . yeah that will do a lot to reverse the supply base erosion that plagues most eProcurement initiatives – Busch’s view of the Ariba picture seems to be oblivious to the reality of situations such as the one with the OECM.
Given that Ariba lost $3 billion on $1 billion worth of sales between 2001 and 2005 while suffering a number of implementation failures about which I have talked about at length in the past, and the fact that the organization more recently underwent what CFO Ahmed Rubaie referred to in my interview with him on April 16th, 2009 as a “DNA transformation,” musings regarding “breaking up large technology and services companies” is like selecting paint colors for a house that is on fire (hence the Rome reference).
This is the Emptoris acquisition of Click Commerce story all over again, in which by expressing my frustration at the level of analyst speak in which “tangential marketing strategies while valid, fall largely on deaf ears as it has no practical value from an execution standpoint,” Busch continues to miss the point with his latest views on Ariba.
The real issue with Ariba, or for that matter vendors such as Oracle and SAP (undoubtedly you have already heard about the latter’s $30 million ERP failure at Marin County), is not centered on “breaking-up the company,” but instead on why the company is broken in the first place.
Once again, and you might find this somewhat difficult to believe, but I truly do like Jason. However, until he and those with whom he has surrounded himself recognize the bigger problem like Rome, his is an era whose days will ultimately be numbered.