Before the summer ended, I had the chance to catch up with Perfect's -- formerly CorMine's founder and CEO -- Hamp Wall. While it was my first time meeting Hamp, he came off not only as a straight shooter, but someone who takes the future of his organization -- and the overall Spend Management market -- very seriously (which is not something I can say for so many CEOs of vendors over the years who not only really failed to appreciate our markets' nuances in full, but placed ego ahead of commitment to the sector). What struck me most about my discussion with Hamp is how it started down the line as an update on the Perfect deal -- based on some of my earlier comments in the summer -- but became much more of a discussion and examination of the core business model of the part of the business formerly known as CorMine.
The conversation direction was a tad ironic. And that's because CorMine’s services and outsourced solutions -- which formed the basis of a unique, fast growing business model -- are quite difficult to find on Perfect's new homepage, at least at this point (I suspect this will be changing in the future). Yet they're absolutely the most differentiated piece of the Spend Management pie that Perfect is selling. This is too bad, as CorMine was -- like CVM Solutions -- a vendor who managed to keep a strong under-the-radar profile while building a marquis-list of customers and a strong market position in its niche area.
For CorMine, this meant focusing on what they termed "non-core" sourcing events for manufacturers. You know, the one-off buys -- often initiated in engineering -- that procurement never wanted to deal with. I love the language on their website about what they do in this regard: "Let's face it, most of our clients might buy a $15K oscilloscope once every five years for their quality assurance lab. We may buy that same oscilloscope 15 times in one year because we are supporting 15 different quality assurance labs across our client base. That "one time" buy for you, is a strategic leveraged buy for us and you reap the savings benefit."
Bingo. Now that's a market very few providers want to tackle, let alone would know how to tackle. And that's why CorMine was able to build such strong momentum in a relatively short period of time. In fact, as Hamp put it to me, and as I know from how large-scale sourcing engagements work in the Big five and operations consulting world, it turns out that they got much of their business from partner firms and other referrals precisely because they tackled an area of spend which could deliver savings after all other paths had been exhausted by other advisors (which could help save consulting projects designed to identify and implement savings which were proving more challenging than one of their partner firms or other sources or referral business could have anticipated).
To tackle this "problem spend", as I'll refer to it, their legacy business model focused on selling everything from a completely turnkey, fully integrated outsourced solution to ala carte content, software and services to customers. Perfect was one of CorMine's technology partners in building this solution, which explains how the ultimate deal between the two materialized. While the legacy CorMine part of Perfect keeps selling these services today -- and as I mentioned at the start of this post -- they appear to downplay them on the Perfect website. To be candid, I'm not entirely sure why.
In part 2 of this post on Perfect, I'll talk about a bit about the direction of the new provider as well as some of the trigger events that I would look for to see how they're fairing with Perfect's old technology. Clearly, Perfect is now a vendor to watch in this sector, but it remains to be seen how they can mesh and grow both business models together successfully.