Theranos and procurement continued . . .

Posted on May 9, 2016

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“whose best interest does the procurement industry press serve . . . the solution providers or the procurement professional? You cannot serve both.”

Or here’s another way to look at the dynamics of such relationships:

“whose best interests do procurement professionals serve . . . the suppliers who serve our business customers, or our business customers whom we serve?”

The above comment from one reader confirmed why we need more voices in the procurement world, if for no other reason than to expand the horizons of both our individual and collective perceptions.

Personally I like the reader’s comment, as it introduces a new way of looking at the question regarding the influence that service providers have on how the media covers our industry.

So, now that the idea presented above has been tabled, what are my thoughts?

In terms of drawing a parallel with the relationship between solution providers and procurement professionals, I would equate business customers with the service providers, and the suppliers with the procurement pros.

While the interests of suppliers are very important, when push comes to shove, they have traditionally taken a back seat to the interests of the business customers.

Think about procurement’s attitude towards suppliers over the years. Specifically, the adversarial nature of negotiating to win. Achieving the lowest price – even if it was at the expense of the supplier, was the mindset with which most purchasing people had (and in many cases still do) approach their job.

I remember sitting in on a presentation by Kate Vitasek, who talked about her years at Microsoft. During the presentation, Kate indicated that her performance and financial remuneration was based on her ability to continually drive down the pricing she received from suppliers.

All of this of course was to serve the better interests of the customer . . . the ones who ultimately generated revenue for the company.

When it comes to the media and the procurement industry, who pays the bills?

For example, how much revenue does a blog such as a Spend Matters generate from non-service provider clients? Or to put it another way, if they lost all of their revenue from service providers, would they be able to sustain their business model? This same question goes for any blog.

Considering this question from the standpoint of analyst firms such as Gartner is a little more complex, given the breakdown of their revenue streams.

It is safe to say that there is little if any doubt that the empirical perception that these firms are highly influenced by service providers has, at least to a certain degree, diminished the value of their insights in the eyes of some. However, and based upon a  discussion stream in Quora which asked How much influence do Forrester and Gartner reports have on purchasing decisions?, it is also reasonable to assume that others rely heavily on what the analyst firms have to say.

Personally – and yes empirically speaking, I have always believed that within the procurement sector, service providers have a good deal of influence over analyst firm coverage.

Generally speaking, I am not alone in this belief. The response to my January 7th, 2011 post Madison Avenue ooops . . . make that Gartner, names Oracle as a leader in supply chain planning, provides testimony to that fact.

This being said, I think it is time for me to do an investigative report on the state of the analyst business – including inviting representatives from Gartner and Forrester on my radio show. I will keep you posted.

Coming back to what prompted today’s post, at the end of the day I do believe that you have to follow the money in terms of filtering the information you receive.

What do you think?

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Posted in: Commentary