This is the second in a two-part Spend Matters Plus series from Thomas Kase, VP of research, on strategies for providers to deliver procurement solutions and services in Asia. This second installment covers specific trends and recommendations for Singapore, Japan, Korea, China, Thailand, Vietnam, the Philippines, and Malaysia. So what should a company looking at an Asian expansion do? If this is a topic that interests you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.more ▸
“Asia” is obviously an impossibly broad label, covering so many countries, with such a range of cultures, languages, and political, ethnic, and demographical issues that we have to paint with broad, sweeping strokes. That said, there are definitely procurement culture traits worth pointing out. Depending on a solution provider’s strengths and capabilities, we think the region is ready for a more serious look – consider it hedging your bets, since everybody is already slugging it out in the U.S. and Europe. So the question is, what are you doing in Asia, the region that outgrows Europe and the US at a rapid clip? In this first of a two-part series on Spend Matters Plus, VP of Research Thomas Kase gives a backdrop on regional issues to know.more ▸
Living in the Atlanta area, I have a certain travel bias in favor of Delta – can’t be helped – so I rack up SkyMiles at a good clip. And here’s the trick – you use your miles to pay for the WSJ. Ok, so it’s not entirely free but comes pretty close. Delta has changed partners for this over the years. Right now it is a company called Newspaper Rewards, and the deal has only gotten better since I got my last subscription. I had to hand over 2,700 miles for about nine months (I think – I renewed back in July last year, but the copies keep coming…) of just the print edition. Now the deal is even better – pay 2,417 miles for 39 weeks of the print and electronic editions. And what's more -- having a newspaper subscription doubles as a weather forecast.more ▸
This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.
As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.more ▸
Intellectual property rights and patents are great assets for many companies and procurement are at least partial stewards of them. They are often attractive assets of course (even from just a sales/marketing perspective), but they are sometimes open to legal disputes. In the case of procurement solutions, competing vendors have material legal exposure – in part because there are so many competitors in the sector that have filed for protections with the US Patent Office.more ▸
Intellectual property rights and patents are big business. And they are, of course, also competitive tools for companies. Witness how many years ago Ariba derailed Emptoris – now part of IBM – as a competitor for a number of quarters and forced a sale of the company based on a patent dispute. But the patent is more than just a tool for vendors to bash competing vendors. They are sometimes open to legal disputes. To the average consumer, the recent Apple vs. Samsung lawsuit over cell phone design and operating system features is probably the most widely recognized legal mess. In May, an Oracle vs. Google dispute concluded with a win for Oracle, with award amounts unspecified (Oracle originally wanted $6 billion).
Patents are powerful tools in the procurement solution software market as well, not just for warding off competitors, but even for generating considerable “income” for the successful parties when push comes to shove. Within the procurement sector, Ariba has amassed an incredibly impressive array of patents (if measured by the yardstick, at least), covering what some might construe as many of the basic elements of the source-to-pay process, including supplier connectivity and collaboration. In Part 1 of this Spend Matters Plus research series, Thomas Kase (VP of Research) provides context for past patent litigation in the sector and begins to cover a number of Ariba’s patents that could affect competitors and customers of competitors down the line. This analysis will attempt to get beyond the legalese with layman’s interpretations of each patent.
Today’s research brief looks at the following three Ariba patents: “supplier/buyer network that provides catalog updates,” “system and method for conducting electronic auctions with multi-parameter optimal bidding,” and “maintenance of a company profile of a company associated with a supplier/buyer commerce network.” If this is a topic of interest to you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.more ▸
Here’s my suggestion for Harley, go partner up with Elon Musk (the founder of Tesla) and create a two-wheeled Tesla motorcycle. Call it the Nikola or perhaps the Nikola Davidson? The electric bike concept has merits, bikes are by and large pleasure vehicles that usually don’t need to a thousand-mile range – I’m sure a lot of people rarely travel farther than 50 miles from home – so electric could work. Ride it to work, charge up there, ride home, rinse and repeat.more ▸
GTCR & Opus Global Buy Hiperos: Consolidation Begins in Supplier Management Solution Market (Part 1)
Marketing can have a funny influence on things. Hiperos labels what it enables as “third party management” rather than “supplier management” or “supplier lifecycle management.” But make no mistake. This is a play with words by a clever marketing department and doesn’t mean a different core value proposition. (We think this comes from a sales focus on finance rather than procurement; to the CFO it’s all a bunch of third parties and compliance, and finance just can’t be bothered with terms like suppliers.) When GTCR and Opus Global acquired Hiperos earlier this week and not only kept the current management (one of whom is a major investor) actively engaged in the business but also put them on the broader holding company’s board, they were making a bet on the need to better manage traditional indirect suppliers, staffing companies, consultants, BPOs, and others who serve customers in a contracted way – in their case, typically large financial services clients. In many cases, Hiperos led with a “meet the [fill in the blank] regulatory requirement” value proposition – a message that works, especially for a finance audience.
But what Hiperos and its competitors (Aravo, HICX, IBM/Emptoris, Lavante, Oracle, SAP, and many others) are capable of accomplishing in the sector far transcends simply meeting check-the-box regulations. Done right, the better engagement of suppliers across a lifecycle is a massive undertaking, as it starts with a tailored onboarding process (don’t count on your P2P or e-invoicing provider to touch more than a few bases in this area) and carries through to supplier engagement, performance management, development, risk management and eventually off-boarding (by PO, assignment or overall) at both the SKU and overall vendor level. And it’s an undertaking that can transform procurement and finance outcomes spanning all non-employee resources and T&E-related spending (which represents a massive portion of the business). For this and related reasons, we believe that in 2015 (and perhaps sooner) we will see more consolidation in this market. In this three-part Spend Matters Plus research series, VP of Research Thomas Kase and Managing Director Jason Busch consider the backdrop and rationale behind the expected consolidation and offer predictions for what moves to watch. Our analysis today begins with why this market is becoming more strategic to customers.more ▸
Earlier today, GTCR and Opus Global Holdings collectively announced they had acquired Hiperos, the supplier (and other third-party) management vendor. Hiperos is originally a supplier performance management (SPM) focused provider from Southborough, Mass. It has since expanded to deliver a broad range of third-party data collection and supplier lifecycle management solutions – and will now operate as a business unit under Opus Global. Opus Global in turn is a JV between GTCR (a private equity firm from Chicago) and Doug Bergeron. Bergeron was until 2013 the CEO of VeriFone and is now the CEO of Opus Global. GTCR and Bergeron go back to VeriFone – which Bergeron (together with another investor) had bought from HP for pennies on the dollar ($50 million for an asset which HP has paid $1.3 billion). When Bergeron resigned after 12 years as CEO, the company had a market valuation of $3.5 billion. (We thought Bergeron’s long-term ownership and patient growth focus background is important to note.) Note also that Bergeron’s background is from the financial services industry – where Hiperos has a strong presence. In this Spend Matters PRO analysis, VP of Research Thomas Kase and Managing Director Jason Busch take a closer look at Hiperos (including a detailed SWOT analysis), private equity/buyout implications, the prospects for the supplier and third-party management market, and what the acquisition means for customers, prospects, and competitors.more ▸
Over the years, ISG has run sourcing analytics and services in a consultative fashion and along the way built a SaaS-delivered software solution (a.k.a. toolset) for spend visibility and category management, as well as data optimization services. Originally just for internal use as they worked with clients, this took on a life of its own as some of ISG’s clients expressed interest. It’s a natural step along the path of self-service that many organizations embark on. These days the tool is managed as an independent business – although under the same ownership as ISG.more ▸
You can take vodka and distill it 159 times (yes, that exists), but it is fundamentally just ethanol - the purer the better. In other words, no flavor! It has to be one of the greatest IQ tests of all times whether a person buys $100+ "premium" vodka or just a fairly basic $25 pick-your-label vodka. Sure, there are bad vodkas out there (stay away from plastic bottles), but it doesn't take a lot of money to get perfectly good stuff. As long as it has been properly distilled and not artificially flavored, you're good to go.more ▸
“When you can’t be bothered to source it on your own” – would be a rather simplistic quip to explain what Insight Sourcing Group does for their customers. The Atlanta-based firm takes a full service and hands-on approach in all sourcing areas. They get their hands dirty analyzing all your spend data and develop a list of sourcing projects that will deliver the best bottom line bang. Over the years they even developed their own spend analytics solution for this purpose – and spun it out into a separate business entity, SpendHQ.more ▸