A recent SpendMatters post on the new Ariba “free” sourcing toolset ruffled a few feathers here at Source One. It wasn’t necessarily the content in the post, which provided some good information, but rather a single sentence in it stating that this was the first offering “…of any material size …to make a product free”, and the subsequent response by Jason in the comments section that “WhyAbe is a small offering from a boutique firm. I do not consider either to have material size / marketshare.”

My partner in crime here, Bill Dorn, correctly pointed out in a counter post that Jason really has no idea what our size or market share is right now, having last talked to us about WhyAbe over five years ago. Since that time WhyAbe has received awards and recognition from analyst firms, been used by Fortune 100 companies and government organizations, including the purchasing department of one of the largest cities in the world, and has been rebranded for smaller “boutique” players as well as the most prestigious online supplier directory in our space, ThomasNet.com.

I don’t blame Jason for the lack of information on our size or share. We don’t run in the same circles, and we don’t advertise. What I do blame him for is giving the appearance of being an authority with knowledge on the subject of WhyAbe, or Source One - even though we both know he hasn’t done his homework on us in sometime.

This got me thinking about other project areas I’ve worked in, where a wrongly perceived understanding of the marketplace ended up costing companies a bundle. One good example is a client that bought a type of container that only two manufacturers could produce. The container was a primary packaging component for their finished product, and an extremely important part of their overall branding. When we arrived, they were single sourced with Supplier A. When we asked about their experience with Supplier B, the comments we received all went something like this:

“We can’t use Supplier B, they have quality issues.”

“Supplier B cannot handle our business. The last time we worked with them, they had a quality failure, and we decided we would never use them again.”

“We had a legal dispute with Supplier B, they won’t work with us.”

Digging a little deeper, we did find that there was a serious quality issue several years prior to our engagement, and it ended up in court. But since that time, no one at the company ever investigated further to find out if the quality issues were addressed, or if a reconciliation with Supplier B was possible. Instead, they stuck with Supplier A and took it on the chin in terms of price, because Supplier A knew they were the only option for this customer.

The first thing we did was contact Supplier B, and we found that the quality issues were in fact addressed in a well-documented fashion, and that the bad blood was long gone on their side. In fact, they were eager to reconcile. The introduction of competition brought the container price down by over 15%, and now a routine bid process and dual-source supply strategy keeps both suppliers honest and helps offset risk of supply shortages.

I can think of hundreds of other examples of customers making wrong assumptions and taking their eye off of markets. In many cases a whole company can have the same opinion about a particular supplier or product, it’s almost like an organizational mantra.

The reality is pretty simple. Markets are fluid. Market Intelligence and “market norms” need to be continually tracked and challenged to make sure you are sourcing from (or writing from) a place of knowledge, not assumption. I imagine that in his dismissal of WhyAbe as irrelevant, Jason might say, “Well, no one else in the space is talking about it”.

Perhaps they don’t mention it because they don’t want you writing about it. Ignorance is bliss, as they say.
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Joe Payne

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