One of the issues that I am very curious to watch in 2009, in regards to the procurement applications market, is how the current economic climate effects growth of procurement solutions providers.

Many of my non-industry friends make the assumption that a crappy economy is good for business because, “every one really needs to save money now, right?” Of course, I agree with that in principle, but the reality can be far from it. In truth, purchasing is always trying to save money but is often constrained by the limitations of budgets, which are generally set for good business reasons. However, future planning (and even immediate savings) can suffer when the short term benefits of budget and hiring freezes take effect in a company.

Many companies I speak to, client and non, are going through drastic cuts in staffing, hiring, consulting, travel, marketing and IT. This era we are in, is no different than what cash rich individuals can take advantage of now – go on an investment buying spree. Cash is King, and if you’ve got it, you should be throwing it in to every discounted opportunity there is out there. Just ask Warren Buffet.

I believe many companies, with progressive leadership that are aiming beyond the next quarter, will realize this and invest in procurement transformation and excellence. However, I fear that too many will not take the challenge and withdraw from opportunity to quickly become best in class. The eSourcing vendors will not lose their abilities and will more likely, be motivated to do more to help companies.

It reminds me of when I took Ballroom Dancing in college with my roommates. We were out numbered 4:1 by eager college girls that were queued up waiting for us to become available for the next dance. I felt like a genius every Tuesday and Thursday for 12 weeks for investing in an under utilized market that had extra capacity.

Yep, its just like that. Ahh, memories…