Earlier in the summer, I reported a number of Ariba customer adoption metrics from their LIVE event. When I published that post, I only thought it fair to solicit similar numbers from another vendor who I know has some large implementations. And this provider, Emptoris, came through with some customer numbers which have all been verified from reputable sources (in other words, I put some stock in them). So here goes ...
From a spend analysis perspective, GlaxoSmithKline, an Emptoris customer, analyzes $20 billion in spending covering over 20 million transaction records. Over 800 members of the procurement organization access the system regularly to identify new savings and document savings capture from existing programs. GSK reports 99% accuracy in classification (a very high number indeed). GSK also uses Emptoris Sourcing, supporting more than 5,000 online sourcing projects per year, covering 250 categories of spend and 25,000 online suppliers across 60 countries. They estimate the value of this sourcing activity to be around $4 billion. Overall, in the past five years, the company has rigorously documented more than $1.8 billion in savings through its procurement operations.
Another user, Motorola, has used Emptoris to source approximately $13 billion per year. This spend breaks out over 500 sourcing projects and 75 categories. In the first 18 months of using Emptoris, Motorola reported saving $600 million. Their largest sourcing event, a $600 million semiconductor buy, represented some 21,000 line items and captured and analyzed 110,000 bids from 48 suppliers. In all, some 600 members of the procurement team use Emptoris at Motorola to work with 1200 suppliers who are also on the system.
Cardinal Health has used Emptoris to aggregate date from 28 financial systems amounting to $2.8 billion in annual spend with over 70,000 suppliers. Using automated vendor and item enrichment, Cardinal has been able to classify over 95% of its spend. Over 300 operational and financial users work with this information using Emptoris.
A large CPG company has used Emptoris to achieve $100 million in year-over-year savings, managing 150 events run by 120 commodity buyers. 30% of these events have enabled on supplier feedback on the specifications (and one presumes have relied on some type of optimization capability). This last statistic is quite telling and shows the migration -- in some industries -- from the use of weighted and non-weighted auctions to more expressive forms of supplier bidding. In one case, this CPG company ran an event with 2000 items and 700 suppliers with open specifications, using Emptoris' optimization capabilities to analyze the results.
From a contract management perspective, Emptoris has one user in the health insurance arena who manages over 250,000 contracts which represent some $30 billion in volume. 95% of these contracts are automatically activated in the firm's backend systems. According to Emptoris, "in addition to significant business improvements (better deals, less risk), a side benefit was over $61 million in realized process improvements."
The adoption metrics of Emptoris' largest customer implementations -- like that of some of Ariba's customers -- speak for themselves. Together, both show what’s possible when it comes to large company-wide roll-outs of Spend Management technology supported by the right set of processes and talent. In the coming weeks, I'll be highlighting some other vendor technology adoption and sourcing event metrics in hopes of continuing to show Spend Matters readers that, to quote Bruce Richardson, quoting the late Ken Sharma, "all things are possible".