The Procurement Chasm

December 7, 2018

We’ve done it!

As an industry of Procurement professionals, we have finally reached the tipping point – we have crossed Geoffrey Moore’s chasm1.  We have finally taken the “Procurement cloud” beyond Innovators and Early Adopters to the Early Majority.

Leveraging information from sources as diverse as Goldman Sachs, Gartner and the cloud providers themselves, it appears the buyers of industry Procure to Pay solutions from companies such as Ariba, Coupa, Ivalua, Jaggaer and others have passed 16% of the “Total Addressable Market.”

1Crossing the Chasm, Geoffrey Moore

This is an important milestone for our industry.

Along with increased adoption across corporate America of these tools, “crossing the chasm” also comes with some baggage.  And it has implications for those companies that are not in those first two “pre-chasm” camps.

“Life isn’t perfect.”  And neither is enterprise software.  But if your firm is firmly in the second camp of “Early Majority” or later, you will be dealing with key stakeholders who have expectations of a more “complete solution.”  That means that part of your leadership role in taking your company on this journey will include a heavy dose of “expectation management.”

We are seeing more of this buying behavior, which pushes decision making to focus on details, that in the whole scheme of things, may not even have that much impact on the eventual business value.  And the cloud providers themselves may solve for those needs in their next few releases.

Anchor your new infrastructure initiative to core business objectives.  By using this North Star as your decision-making filter, there will be less chance that your project will be delayed or limited by distracting arguments about “edge use cases” that will not have that much impact on the overall business value of getting spend under management.

As always, the professionals here at Shelby are happy to have a conversation about what we have seen across other clients and can be a good sounding board as you go through your process.

John Dreyer, President & CEO