Although word began to leak out in procurement circles that ICG Commerce was about to change its name, the company formally announced its new branding today. ICG Commerce has become Procurian. For those unfamiliar with Procurian, the organization is one of the largest providers in the procurement services space (inclusive of BPO, market intelligence, etc.). They're also fundamentally different than most in the market, shunning the offshore resource-led or "co-mingle your spend with our spend, contracts and team" approaches that categorize most of the rest of the BPO/high-touch procurement services market segment. Still, despite their differentiation and approach, until now, the company's brand image sounded more like a division of their major investor/owner (ICG) rather than a procurement powerhouse in its own right.
With the name Procurian, the former ICG Commerce is hoping to put the independent brand identify question to rest once and for all. It's also hoping to emphasize one of its core strengths, the infrastructure on which it has built all of its offerings -- whether category-specific or indirect-wide -- as well. But perhaps the more interesting element of the rebrand (and far more important from our standpoint) is the positioning of "The New Procurement" that Procurian stakes its new image on.
"The New Procurement" follows a path in a similar manner to what Ariba came up with by creating the phrase "Spend Management" almost a decade ago. But "The New Procurement" is arguably more fleshed out and easier for existing procurement organizations to identify themselves with than Ariba's earlier effort. More important, this "New Procurement" thing -- with or without caps and trademarks, mind you -- is something that should enter the vernacular of procurement organizations regardless of whether or not they ever engage Procurian. And that's because its underlying principles and elements deserve to stand on their own, without a company brand behind it.
As Procurian explains in their new core whitepaper on the topic, given the challenges inherent in optimizing limited resource in today's climate, "Stretched procurement teams pursue direct spend opportunities and simple indirect categories, choosing the path of least resistance and remaining cut off from effecting any sustainable and effective change across more valuable indirect areas. This is why corporations need an entirely new approach to driving to the next level of procurement and business value across the full scope of the goods and services they buy. We call this The New Procurement, which represents both a new operating model and philosophy based on six underlying principles."
The six principles of the New Procurement (which you can read about in the paper) are as follows:
- Procurement must address 100% of spend globally
- Procurement must support sustainability and corporate social responsibility objectives
- Procurement must apply real-time market intelligence
- Procurement must deliver realized savings and continuously optimize spend
- Procurement must enable agility and mitigate risk
- Procurement must actively identify and fuel new sources of growth
By enabling the New Procurement, Procurian argues that organizations will foster "a more responsive, knowledgeable and accountable procurement function will help organizations adapt to the needs of the new global economy by delivering more value, mitigating risk and ensuring continuous improvement." Moreover, "By embarking on the journey to the New Procurement, transformational leaders will not only overcome internal skepticism, but align their organization's strategies and behaviors to the business's strategy to make their procurement function an indispensable partner for growth."
We particularly like some of the next-level thinking in what it means to apply these principles. Take market intelligence, for example. "The New Procurement dictates that companies should no longer face a disadvantage from the information asymmetry they now face in large and diverse indirect supply markets," Procurian suggests. Further, "Sourcing professionals must compete against a market which knows far more about pricing, supply and demand trends, overall market direction and key points of post-negotiation pricing and billing than they do. As a result, procurement organizations almost always lack real-time market intelligence to inform spending strategy, identify alternative suppliers or products, create an advantage in negotiations or inform ongoing management of the category beyond the initial sourcing event in these areas."
The New Procurement, in contrast, tackles market intelligence head-on as a prescriptive priority for investment and focus. And it's about time. Whether or not you give you two figs about ICG Commerce changing its name, we believe the "New Procurement" concept has legs. And it's more than just supporting branding. In fact, we think the real news that people will remember from the Procurian launch was it marked the first time the New Procurement was introduced as a concept. Ultimately, we suspect that just as the phrase Spend Management caught hold and created a new category, so will the New Procurement, or at least what it stands for, even if the tagline remains solely Procurian's.
So regardless of whether you're a Procurian customer, prospect, competitor or partner, I strongly recommend familiarizing yourself with the New Procurement and what it stands for. It's a surprisingly basic philosophy that if followed, will undoubtedly prove transformative for procurement organizations across all categories of spend.
Disclosure: Procurian is a Spend Matters sponsor.
As a final aside, our enthusiasm for the "New Procurement" concept and supporting six elements has been strong ever since Procurian shared it with us for the first time -- and especially as they fleshed out the analysis of it further -- although we'll also take at least "inspirational" or "forward-thinking" credit for using the phrase in a different context as the title of our keynote presentation at Beeline's User Conference last spring: Welcome to the New Procurement.