German procurement software firms look to international growth

At the eWorld event last week, I had an interesting conversation with the CEO of a software company. More on him later, but the point we discussed was the position of the UK as a “bridge” between the USA and mainland Europe.

Many US based firms – we’re talking software here but it is probably true of many products and services – will make their first moves into Europe by looking to the UK as a base and a first sales target. As and when they see success in the UK, they will then spread out into Germany, France, Benelux, the Nordic countries, with perhaps the Mediterranean countries as the next wave after that.

Similarly, companies from France or Germany often expand into the UK and use that as the springboard into the US. There are exceptions of course. We featured b-pack a while ago, a French firm with a decent US presence but not a lot yet in the UK. FullStep are a Spanish equivalent, developing a US presence before looking to conquer other European lands.

But one trend we’re certainly seeing is a number of strong German companies in the procurement technology space, both sourcing and purchase to pay, starting to move beyond their home territory in a more focused manner. The strength of the German domestic market is perhaps both a positive and a negative for the development of these firms. The size of the German manufacturing sector in particular means that a good software / solutions provider can do well and grow to a reasonable size supporting organisations within Germany, with perhaps a little international business where those domestic clients have foreign offices or factories. They tend to be financially stable as well, with a culture of carefully funded and steady growth rather than huge borrowings.

Unlike firms from, say, Finland or Sweden, the incentive for German firms to grow beyond their borders doesn’t kick in for some time. So the positive for clients is these firms are often well-established with proven and impressive products; the negative might be a lack of experience of working beyond the home boundaries.

Anyway, the particular CEO I mentioned above was Andreas Schwarze from Onventis. They’ve got a very broad suite of products ranging through P2P and Sourcing tools – we obviously can’t tell from a chat how good they are, but we look forward to having a closer look at their products. It’s all on-demand (“cloud”) based and they’ve got a large number of strong reference customers  – Schott, Agip, Raytheon etc.  We did actually feature them once before, when they were the solution provider behind the winner of the 2010 BME Innovation Award (SCHOTT AG were the client).

One of Onventis’ major competitors in the German market is the rather strangely named Pool4Tool. My US Spend Matters  colleagues are in the process of examining and writing about Pool4Tool – I was part of a recent web demo and it is one of the broadest product suites I’ve ever come across . (Look out for more from us shortly). As the firm says “The modular portfolio includes solutions for over 40 processes, including supplier relationship management, sourcing, supply base management, supply chain management, eCollaboration, quality control, and product costing”.

And our final firm for today is Wallmedien. We caught up briefly with Gary Hare the other day – an old friend of Jason Busch, a real procurement guru, and now leading Wallmedien’s push into the US while they also look to strengthen UK presence.

Wallmedien are in a somewhat different space to the two previous firms we’ve mentioned here – they’re particularly strong in working with SAP users to add to the functionality and usability of SAP products in both the P2P and sourcing areas. As they say,

“In the SAP environment, WALLMEDIEN’s solutions form a standard in electronic procurement. WALLMEDIEN develops and operates concepts for the automation of processes in operational and strategic purchasing”.

And they already have significant experience of working in different countries (46 at the last count) and languages, generally via their large multi-national but German owned clients.

Look out for more coverage of these firms as they look to replicate their home success more widely through 2012 and beyond...

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