E-Sourcing Forum » Guest perspective on acquisitions

Guest perspective on acquisitions

February 8th, 2008 at 07:52am Purchasing Executive - Global 1000

Today, I would like to welcome a guest post from a practitioner in management at a F500 company. It is this person’s first attempt at blogging and I welcome this opportunity to get reactions from people that have seen many situations from front row. Right now, I have made an account for this budding blogger, and in case you are wondering, they do not work at an Iasta client nor have I ever personally met them. Without further ado…and I hope this will not be the last attempt…

It’s recently been rumored that a major consulting firm is bidding to buy a large sourcing software pro. This idea intrigued me because of my exposure to both, but also because it seemed so anathema to what consulting firms are supposed to provide. What is the strategic objective for such an acquisition? Are they trying to get ahead of the curve on the move away from large procurement systems with huge implementation and maintenance burdens?

My experience with large consulting firms (lukewarm at best) has been primarily around the implementation of these comprehensive, integrated procurement systems. So if one hires an external “partner” (the term used for someone you hire to do something you think you can’t do yourself) to provide independent advice on software alternatives and concomitant process improvements, doesn’t this acquisition compromise the very impartiality you should be able to assume in any recommendations they make? The inherent conflict of interest would necessitate a very hard look at the kind of advice provided by consulting partners when they have “skin in the game”, so to speak. I know that they routinely form “alliances” with many software providers, but the appearance of independence from any one of them in particular could be argued because of the sheer number of alliances they seem to have. Outright ownership of any one product is a different kettle of fish.

At the end of the day, most of the time they seem to provide only one solution to all customers, tailored just enough to look new and different. I must believe that any software which they own would be presented as integral to any proposal they make.

On a different note, will this mean that other large consulting firms will follow suit? As with many industries, the “me-too” mentality among them is alive and well, and few could be considered at that point to be truly independent from the product(s) they own.

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