Emptoris Forges a More Flexible Customer Path (Part 1)

Last week I had the chance to get a quarterly update from Emptoris, covering a range of areas including, but not limited to, their latest acquisition of Click's Services Procurement Solutions into their own solution portfolio. The briefing was timely, as I've gotten a lot of questions of late from folks in the market about Emptoris' future direction. In this post I'll relay some of the news from the briefing as well as a bit of analysis. But later this week, I'll provide a post focused on my analysis of Emptoris' future direction. As a teaser prior to Part 2 of this series, despite the fact that I believe any type of investor-driven roll-up strategy will hurt innovation, I'd argue that Emptoris is beginning to blaze a new path in the market that should appeal to a range of companies (not just innovators and early adopters) looking for greater solution flexibility combined with rapid results.

But I'll save that argument for a little later. For now, I'll touch on both facts and a bit of vendor spin, as provided by Emptoris. Let's begin. According to Kevin Potts, Emptoris' VP of Marketing and Product Management, the solutions provider has run 406 sourcing events in 2009. Regarding the "big spend" claim, Emptoris is now up to over 50% world GDP in spend analyzed according to the CIA world fact book and numbers Emptoris provided to me (whether you measure GDP based on currency or PPP, it's still over 50% either way). To this end, Emptoris has analyzed "$38.5 trillion in spend" across "13.9 billion in transactions". Of course spend claims like this are things nearly every vendor makes, but I'd urge everyone to take them with a grain of salt, as they can vary tremendously based on what vendors are actually reporting on (e.g., spend analyzed a single time or multiple times based on refreshes, etc.)

But more important than absolute numbers is the direction Emptoris is taking to the market. This now includes a shift to targeting "higher value savings categories, consolidation on a single platform and less chest thumping [with] more of a customized focus". This last point speaks miles to how Emptoris can begin to stakeout its own growing niche in the market as a sophisticated provider, and one that can more narrowly tailor solutions to specific customer environments (vs. the limited configurability of many On Demand approaches and the costs of truly customized ERP-based deployments). Emptoris sees itself targeting both what it describes as both the "experienced procurement" segment of the market as well as the part of the market looking for "procurement modernization". Roughly speaking, this segmentation, as Emptoris defines it, is based upon size of company, procurement structure, in-house e-sourcing expertise, spend under management and complex categories managed.

In going after both of these segments, Emptoris plans to position similar messages targeted at both the procurement and finance communities, including programs that offer guaranteed savings and more flexible pricing. They're also planning to leverage their new Services Procurement Solution to help companies pursue not just temporary labor categories, but other services categories as well. For example, many of the more advanced Click customers are using their services procurement platform to manage a range of categories across the services spend lifecycle including, as I noted in a previous post, "facilities management, software, leased services, financial services, brokerage contracts (managing receipts and payments from trading), utility services, consulting, outsourcing, call centers, marketing agencies and print".

Going forward, Emptoris plans to continue to help their services procurement customers to capture savings for different categories of services, focusing first on delivering short-term savings returns. To facilitate these efforts, look for Emptoris to continue to strengthen its partner relations in the services procurement arena including partnerships in the staffing, payroll/1099 and consulting/advisory firm domains. They're also releasing a new enablement package -- based on work I know Click had been up to for sometime before the acquisition -- designed to help companies achieve quick and significant returns in services categories based upon a "rapid value assessment framework" and recommended business processes aligned with program management. This is no joke or marketing spin. I've seen earlier drafts of this program material and it's impressive.

Emptoris is also planning an implementation roadmap that includes ways of helping companies gain a more strategic view into their contingent labor spend that also combines elements of what they describe as "strategy execution in the form of sourcing and contract management" with transaction enablement through services procurement lifecycle management and tight ERP integration and performance intelligence tied to spend analysis and supplier performance. This will allow companies, for example, to enforce terms and conditions in services contracts and to drive better vendor performance through active service level monitoring and relationship management. I suspect we'll be hearing much more about these new capabilities -- and a range of other enhancements -- as Emptoris drives towards their Version 8 release later this year.

Jason Busch

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