In a column earlier this week, I examined how boutique e-sourcing providers like e-Three are gaining strong adherents in the sourcing world from procurement leaders attracted to the cost, flexibility, and expertise that smaller firms offer, especially in the case of what have largely become commodity, full-service e-sourcing projects (i.e., what FreeMarkets originally pioneered). But part of the appeal of an e-Three is not just that its principals are highly customer focused and that the price is right for the services they sell — it’s also that they’ve got an established technology partner behind them. Recently, Oracle and e-Three announced an expanded partnership between the two organizations, which includes additional capabilities in the area of spend visibility. Clearly, Oracle’s choice to embrace boutique partners like e-Three reflects a belief that the future of this market will not just be owned by large consultancies, SIs, and outsourcing providers.
The e-Three/Oracle relationship in the area of spend analytics and audit/recover is perhaps most interesting as a signal of where the integrated software/services partner model might be headed. I particularly like the extension of spend analysis to include the ability to “recover profit through detailed interpretation of overpayments, duplicates, and supplier overcharging” by leveraging Oracle technology (and, no doubt, some good old-fashioned Excel and Access manipulation). Perhaps more interesting on a higher level, though, is that even though Oracle also delivers hosted versions of its own applications, it’s also clear that they realize that pursuing a strategy along the lines of an Ariba — which has opted not to embrace a broader ecosystem of partners that leverages its technology or delivers it via hosting services — could limit their potential market share…
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