ConnXus.com — A New Supplier Diversity Solutions Provider

No sooner had the national NMSDC supplier diversity conference in Atlanta ended before I was told of a new technology entrant -- ConnXus.com -- into this category.ConnXus is a recently funded start-up with a solution focused on delivering a marketplace where small, woman- and minority-owned companies participate in bids from Global 2000 companies -- supplier diversity broadly defined. Their online marketplace solution makes me think of MFG.com with a dose of Ariba's supplier network in the way it matches qualified suppliers with bid opportunities and permits buyers to search for the right vendors -- except in a diverse format, and spanning a long list of spend categories. The company is closing in on a combined supplier and buyer count of 1,000, so it is still a relatively small but ambitious initiative. Despite the company's short time in production, they are off to a good start with around $75 million in bid opportunities posted to the site since launch last December.
The company is led by its founder Rod Robinson, who arrived at this solution format from many years in consulting for firms like AT Kearney and Accenture, with a 3-year stint as the CPO for Cincinnati Bell -- where the task of finding the right diverse vendors to include in bid opportunities was frequently a challenge. It is clear that Rod's consulting background is paying off now that he is building his own business -- procurement outsourcing providers BPO firms such as ICG Commerce and a growing list of buyers from Global 2000 companies are now steering bid opportunities through ConnXus.

There are several supplier networks in the marketplace, so ConnXus will probably face significant challenges trying to break into the field -- in addition to their obvious diversity play, one differentiator could be performance ratings. In the ConnXus solution, suppliers can request ratings from prior customers, via the ConnXus rating system, that in turn link back to their profile. Lack of performance feedback has long been a critical challenge to supplier diversity efforts. In large part, since disseminating supplier performance data across organizations is difficult without running afoul of corporate IP rules, or even worse, anti-trust laws. It will be interesting to see how this takes shape at ConnXus.

After their successful investment round, Rod has managed to remain the company's majority owner, although ConnXus' most prominent investor is now John Pepper of Procter & Gamble fame. Pepper is also on the ConnXus advisory board and his significant product placement and promotional skills will likely be put to the test as the growing company now needs a significant marketing effort to build recognition among both Global 2000 buyers and their prospective suppliers.

At Spend Matters, we wish Rod and his team great success with the new venture and look forward to continuing the dialog.

- Thomas Kase

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