Author Archives: Peter Smith

Spend Matters 50/50: Achilles – A Provider to Know in 2015

- August 18, 2015 3:00 PM | Categories: Featured, Solution Providers

Achilles is one of our 50 Providers to Know. We will be highlighting 100 companies (50 to Know, 50 to Watch) from our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs.

Achilles occupies a space it has made very much its own in the procurement solutions market over the last 20 years, with little direct competition. With its origins in Scandinavia and the UK, it has become the largest player in the world in the field of supplier qualification and information management.

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Spend Matters 50/50: Trade Extensions – A Provider to Know in 2015

- August 6, 2015 3:04 PM | Categories: Featured, Solution Providers

Trade Extensions is one of our 50 Providers to Know. We will be highlighting 100 companies (50 to Know, 50 to Watch) from our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs.

Trade Extensions is a fascinating firm, very different from pretty much any other on our list. Founded by brilliant Swedish mathematicians, then getting an injection of British commercial blue-chip management some years ago, the firm has stayed true to its roots in complex optimization, advanced sourcing or market-informed sourcing, as we like to call it.

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July Stock Portfolio: Accenture and Capgemini Have Successful Month, Others Struggle

interset rates Doing this monthly round-up this year has been a little depressing at times, particularly looking at the performance of the shares chosen by our Spend Matters “expert” team, which includes myself as well as Nancy Clinton, editor of Spend Matters UK/Europe and Public Spend Matters Europe, and Jason Busch, Spend Matters founder and managing director. Remember, we each allocate our own imaginary million dollars across our choice of stocks included in our overall portfolio of 24 firms that have an interest in the procurement solutions market. If you have been keeping up with our portfolio this year, you know we have thus far had a fairly rough go at it. See which companies had a good month and the many others that struggled during July.

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Xchanging Shares Plummet on Half-Year Report – Questions About Future of Procurement Business

- July 31, 2015 2:30 AM | Categories: Finance, Industry News

stock prices The half-year results for Xchanging released yesterday were intensely disappointing to shareholders, who saw the value of their shares fall by 20% instantly, to a new 3-year low of £0.97. That is still above the bad days when founder David Andrews resigned, in 2011, after major profit warnings, and the shares fell to £0.50, but the current price is close to half what it was as recently as last autumn. We typically view Xchanging as a procurement outsourcing business, yet the results highlight 2 points. First, the procurement outsourcing and software element only accounts for some 6.5% of total revenue – £13 million out of £200 million. Yet it also casts a very long shadow, in that the poor results are being almost totally laid at the door of the procurement business. Before looking at the specific procurement issues, just run through the headlines. Gross revenue was £240.2 million in the half year, down from £282 million compared with a year earlier. Net income was £199 million against £205 last time. Operating profit was £20.4 million against last year’s £20.0 million, but statutory operating profit was down from £24.2 million to a loss of £41 million after the write-offs, discussed below. In terms of the divisions, the business process outsourcing (BPO) arm lifted adjusted operating profit 8.8% to £28.4m, with the technology segment 52% stronger at £4.1m. Procurement, which contributes just 6.5% of net revenue, saw some growth in the software business but a weak performance in the traditional outsourcing business, combined with underperformance in one of the new “tail-end spend management” contracts. “Net revenue was £13.0 million (HY 2014: £15.9 million), and the adjusted operating loss was £6.8 million (HY 2014: £1.7 million loss). This was after allocating central overheads of £1.8 million (HY 2014: £1.9 million),” the company said in its half-year report. “

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Spend Matters 50/50: Arachnys – A Provider to Watch in 2015

- July 30, 2015 3:18 PM | Categories: Featured, Solution Providers

Arachnys is one of our 50 Providers to Watch. We will be highlighting 100 companies (50 to Know, 50 to Watch) from our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs. We met Arachnys around a year ago, and the firm, which has the tagline “instant worldwide due diligence,” quickly struck us as a strong candidate for our 50 to Watch list. Based in London and with an office in New York as well, the firm was founded in 2010 by David Buxton, who previously worked as an "investigator" for global risk consultancy Control Risks in Russia and Eurasia, which sounds exciting and probably was.

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Does ‘Open Book’ Help or Hurt the Public Procurement Contract Process?

- July 29, 2015 2:25 AM | Categories: Procurement Commentary, Public Sector, Technology, UK/Europe

Open book Let me start off with a disclaimer: Yes, this article focuses on the public sector in the UK. But, if you are outside the UK and not in the public sector, do not despair! I promise this does have relevance to you and will, hopefully, still be interesting, regardless of whatever branch of procurement you work in. One thing the UK has definitely done right is tried a lot of different procurement ideas and has probably been an early adopter in many areas. That includes bringing private sector expertise into public procurement, collaborative buying initiatives, use of category management processes, outsourcing complex services delivered to the citizen or adoption of some aspects of e-procurement. Currently, one of the hot topics for UK public procurement is whether public sector contracts should habitually make more use of “open book” contractual provisions. We discuss what “open book” means, if it is necessary and the pros and cons of it.

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Spend Matters 50/50: Sievo – A Provider to Watch in 2015

- July 20, 2015 4:46 PM | Categories: Featured, Solution Providers

Sievo is one of our 50 Providers to Watch. We will be highlighting all 100 companies (50 to Know, 50 to Watch) in our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs. Spend Matters has been following Sievo’s progress for 5 years or so now, after being fascinated by its software from the first encounter. Founded in Finland in 2003, the firm has expanded at a steady pace into other regions, although Northern and Western Europe are still very much the core market, and the corporate center of gravity is still in Finland.

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It’s Flaming June for the Spend Matters Stock Portfolio Experts

- July 9, 2015 2:37 AM | Categories: Procurement Commentary, Solution Providers

greece You may be getting used to this as the opening comment, but June, yet again, wasn’t a good month for the 3 Spend Matters stock pickers. Jason Busch, Nancy Clinton and I chose our own portfolios at the beginning of the year, and the story up to now has been Nancy out-performing the 2 more experienced, in theory, stock pickers and procurement experts. But this month – disaster for her. Jason and I are neck and neck now for second place, but were also down, but only by some 3% to 4%. That means that Nancy is still just in the lead, having lost a mere 14% of her original stake, whereas Jason and I have seen our portfolios decline by just over 15%. Not impressive.

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Spend Matters 50/50: Vortal – A Provider to Watch in 2015

- June 30, 2015 2:15 PM | Categories: Featured, Solution Providers

Vortal is one of our 50 Providers to Watch. We will be highlighting all 100 companies (50 to Know, 50 to Watch) in our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs. Vortal is a Portuguese software firm specializing almost entirely in the public sector (although as we will see, it also works directly with the suppliers to the government sector). Portugal was one of the first countries to mandate government bodies to use e-sourcing (advertising of contracts and communication of documents at least) in Europe, which gave the firm a good base to grow its domestic business and then use that as a platform for expansion.

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Where Do ‘Procurement Ethics’ Policies Go Wrong?

Image of business contract on background of two employees handshaking The recent events around FIFA and the allocation of football (soccer) World Cups raise some major issues around ethics, corruption and behavior in business and indeed in life generally. While at the moment we are talking about allegations in the main rather than proven facts, it is clear that large amount of moneys have been used to try and influence the voting behavior of the delegates who decide which country will host the World Cup events. That hosting is now very lucrative for the country involved, and the huge value of media rights for the event also provides incentives for fraud and corruption. But how does this relate to procurement organizations? Over the years, we have seen a lot of procurement ethical policies that were not fit for purpose. So given the current focus on this topic, we thought it was worth sharing a few of the common problems that we’ve seen with such statements and are suggesting ways to improve them. We share a handful of the most common issues and how to avoid them.

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BravoSolution To Become Single Platform S2P Provider

sea-dawn-sky-sunset-large As part of our continuing coverage of BravoSolution and its BravoConnect event that we’ve been attending, CEO Jim Wetekamp took us through the new BravoAdvantage platform, which not only enhances functionality in current Bravo products, but also focuses on a supplier management-centric approach called "supplier value management" (SVM) that is at the core of its platform. But, the bombshell that was quietly dropped (in a good way) was the news that Bravo is expanding beyond its current focus of sourcing and supplier management and working on adding P2P to the source-to-pay (S2P) space.

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In May, The Flowers Were Blooming, But Our Spend Matters Stock Portfolio Was Not

- June 8, 2015 2:43 AM | Categories: Finance, Procurement Commentary, Solution Providers

SWE2OO4DW6 As we are approaching the midpoint of the year, we might want to start looking at just what is happening to the procurement software market, certainly in terms of the quoted companies that represent “our” sector. At the end of May, it is a sorry story for our portfolio of procurement-related stocks, and an even sorrier one for 2 of our 3 intrepid Spend Matters stock pickers. This Spend Matters Plus article provides an update on how the month of May fared for our notional Spend Matters Stock Portfolio of 24 companies quoted on various stock markets and that operate in some extend in the procurement solutions sector. Hint: May didn’t go so well…

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