In this final post in this Friday Rant series on what’s holding Ariba back (see Part 1 and Part 2 here), I’ll continue to delve into the services question that looms large over Ariba’s current offerings, future vision, and channel partnerships. I believe this issue remains the single most vexing challenge for Ariba; I also believe it’s the largest obstacle to Ariba’s double-digit growth prospects as well as stronger partner and customer relationships. In the past few months, I’ve had the chance to speak to a handful of those close to Ariba’s services organization (both current and past employees), and there seems to be near-consensus that Ariba needs to be more deliberate with a definition of its overall strategy in this area.
Nearly everyone agrees that, until it makes its plans clear, Ariba’s sourcing services business will most likely see a flat-to-declining (albeit high-margin) P&L. This is tragic given the value that I know this organization is capable of delivering relative to its competitors (as a former FreeMarkets employee, I’m certainly biased here, but I sincerely believe that this group is top notch, from both an expertise and value standpoint). Moreover, this is even more tragic because the essence of the original nucleus of this team remains largely intact. Even though there have been some moderate profile exits since the FreeMarkets years, it’s been a gradual exodus. Indeed, much of the original team remains and, without question, it has some of the most efficient sourcing-services delivery arms in the world, thanks to the Six Sigma work of Kent Parker and others over the years…
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