Catching up With IBX (Part 2)

In my first post in this initial two-part series looking at IBX, I provided some context around the solution providers overall strategic direction as well as their current focus around e-sourcing (including the platforms which they deliver and support for customers including Emptoris, SAP and Portum). In this post, we'll continue the analysis, examining some of the existing capabilities that IBX delivers in the P2P area (we'll save the roadmap and planned upgrades for a more in-depth analysis later this fall).

Today, we can probably best capture the essence of IBX's P2P offering by saying that they're a more regional (at least historically) equivalent of Hubwoo. In other words, they are strongly committed to leveraging the SAP platform as the foundational component of their offerings. Unfortunately, at least at this stage, it's still a version of SAP SRM that is functionally and aesthetically in the dark ages relative to SRM 7.0 and other competitive applications (e.g., Ariba, Perfect, Coupa, Ketera, Oracle). But I suspect IBX will quickly begin to offer SRM 7.0 in a hosted capacity sometime in 2010 if not before -- at least as an option for their clients.

The real value that IBX brings to customers with its P2P applications is not just the core SAP workflow and requisitioning technology itself. Rather, it's what they layer on top of it. A combination of proprietary and licensed technologies and solutions, for example, help IBX drive supplier enablement, content management and search capabilities beyond what SAP currently provides directly. While this is not a novel strategy -- Perfect and Hubwoo have followed it to a "T" as well -- it is certainly one that SAP SRM customers require to drive even reasonable levels of spend under management without massive upfront and ongoing supplier enablement and management costs.

Supporting all of these capabilities is a professional services organization that is one of the top procurement and operations players in the Nordic countries (in all fairness, there really aren't that many significant services operations in the region). In addition, IBX also has material operations outside of the Nordic region, including in Germany, Italy and the UK, and they're leveraging these operations as a beachhead for further global expansion. Still, the Nordic region is where they're best known. While I do not believe that on a regional basis the team has as many consultants as Accenture (nor as many strategic/operations resources as McKinsey and AT Kearney, at least combined), they bring particular expertise in both the strategic and transactional aspects of procurement -- not to mention the underlying SAP technology. In my view, when it comes to getting the best value for customers, this is absolutely critical, especially in the P2P area. Companies in the US and Europe are increasingly looking for P2P solutions vs. just consultants and systems integrators to create plans and slam them in.

The nuances of supplier enablement, content management and search are universal -- and combined are what can make or break the success of any SAP SRM initiative. Traditional SIs are not geared up to deliver -- at least when they're not managing a P2P relationship on an outsourced basis -- these services economically because if you're reinventing the wheel each time on a point-to-point basis and integrating disparate technologies on the client's dime, costs can sky rocket (as can the time to fully deploy a system). The IBX clients I spoke with at their recent event confirmed that one of the main reasons they have engaged IBX to work with them in the P2P area is because of the leveraged approach they bring to the table to not only get procurement environments up and running, but to operate them on an ongoing basis at a reasonable cost.

Moreover, IBX appears to have fixed all of the prior technology challenges that sidetracked some of these efforts earlier in their life as a company. All in all, this appears to be a good recipe for continued P2P customer success -- in the Nordic region and potentially far beyond.

Jason Busch

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