Last week, I had the chance to catch up with Ammiel Kamon and Kevin Potts from Emptoris, covering a range of areas from new customer wins to hot customer areas of interest and general buying trends in the market. In today's post, I'll offer up some specifics about Emptoris' traction and where they see the market going, as well as my analysis about how Emptoris is performing. I'll discuss these specific observations in three categories: product traction, solution trends and market observations.
First, let's examine product traction. Based on the customer wins that Emptoris shared with me, it seems that the new deals in 2008 seem slanted more towards contract management than other areas (though Emptoris does have a number of full-suite wins which they shared). However, from the information provided, it does not appear that they are claiming many significant stand alone spend analysis or sourcing wins. This could just be because they chose not to share the information, but in the past, I remember greater distribution of new customer wins. In the first post in this series, I pointed out that Emptoris did have one new customer win where supplier performance management was the initial product selected. I believe this suggests that Emptoris not only has best-in-class capabilities in supplier performance and supplier surveying -- I believe they do based on digging into the product last year -- but also that certain companies and industries are beginning to take supplier performance and supply risk more seriously.
Second, let's tackle solution trends. Based on my conversation with Emptoris, it's becoming clear that this is a company which has moved far from its software only roots and is now more than capable of delivering solution-driven approaches to sourcing in both run-of-the-mill and higher complexity situations. Kevin Potts and Ammiel Kamon shared that the company has now run 1,300 managed sourcing events, supporting 10 languages. They have a staff of roughly 25-30 people based out of India that supports their full-service sourcing capabilities including supplier training, surrogate bidding, translation etc. This language support has been a competitive differentiator in some sales situations where they’ve replaced incumbent providers (e.g., Russian language support capabilities).
Emptoris is also realizing traction with its CombineNet-like (some might say "light" instead of "like" but I’m not going to make that judgment call today) optimization services for complicated spend categories like transportation that require significant support. In one situation, a large privately held global company was sourcing 1400+ lanes across Europe. Because of rising price markets thanks to fuel surcharges, they had planned for a 5% (2.5 million euro) increase. Emptoris provided software and support which helped them realize a cost increase of only .4% while also consolidating the supply base down to 40 suppliers from 78 prior to the event. Numbers like this suggest the value that these types of services-enabled sourcing projects can bring.
Finally, I'll close this post by providing some additional context and background about where Emptoris sees the market going (at least this year). If you believe Emptoris' marketing focus -- as I do -- the provider has done a credible job educating the market around how sourcing and supply management can help companies under current market conditions. Emptoris' webinars with ISM and others around such areas as currency and credit risk, recessionary fears and sky-high commodity prices (their words, not mine) are spot on from focusing on the real environment that procurement and operations organizations face today. I suspect that by tying how the right set of technology and services can help companies reduce (or avoid) costs and risks in today's times to their own solutions, that they’ll have eager ears willing to listen inside companies across industries today.
- Jason Busch