IBM Procurement Event – the highlights, including a new partnership approach

Earlier this month, the procurement group at IBM - based around the Emptoris product suite - held a customer and networking day at their London South Bank offices. It feels like IBM is getting more active again in the market for procurement and spend management software, a couple of years post the Emptoris acquisition. We have had the impression that there was a lot going on in IBM, including greater internal adoption of Emptoris products, but maybe some developments were less visible to the outside world. That may be changing now.

I was asked to facilitate the day in London, so that was a paid engagement for me, but this is written from my own independent perspective. But there really was a lot to take in through the day, and there is no doubt that the full technology might of IBM has a lot to offer the procurement world, as we will see.

The opening remarks from Rob Morris, VP Industry Solutions Europe, set the scene for the day, as he touched on key themes such as analytics, mobile, security and social. One interesting fact is that there are now 7,000 people in IBM working on or in connection with cognitive computing and related initiatives, centred on “Watson”, their super-computer. More on that later.

Pat Knight, VP in the IBM internal procurement function, was impressive and interesting when talking about the firm’s internal procurement transformation journey, and the balance between a centralising , command-and-control type procurement function and the more flexible approach that is probably needed in smaller more entrepreneurial firms. As IBM acquire those type of businesses, procurement has to adjust its approach somewhat.

Back to the technology – and a presentation on Mobile was illuminating in terms of some of what we are going to see in the IBM product suite. The focus is very much on making applications easy to use on tablets and smartphones as you might expect. It all looks good and the key comment probably came in the pub later from an Emptoris veteran, who said, “we always knew what we wanted to do with mobile in Emptoris, but didn’t quite know how to do it. You join IBM and you find they have 100 of the world’s experts in mobile who know exactly how to do it”! So expect to see some positive developments there fairly soon.

The other technology focused session was around Watson, the IBM super-computer and its capabilities generally and in the procurement space. There’s a lot to talk about there, so we will come back to it in part 2.

From a business point of view, the most interesting announcement was of a new IBM “partnership” approach. We don’t have the full details yet, but IBM is looking to partner with a number of specialist procurement and supply chain consulting firms in different countries. The first example, presented at the event, is between IBM and State of Flux. Alan Day, founder of that firm, spoke and presented a first view of their 2014 Supplier Relationship Management (SRM) survey and report. As always, that looks like a fascinating piece of work and again we’ll feature it in more detail when it is properly launched.

It appears that these partnerships may work on a number of levels if they succeed. There is a pure “cross-selling” aspect, so presumably State of Flux will promote the IBM / Emptoris product range to their clients, and IBM will recommend State of Flux if their customers want help in the SRM or related areas. But it also appears to be a way that IBM can accelerate some of their thinking and activities around procurement, outside what may be the constraints of the IBM “system” at times – a bit like the “innovation lab” concept perhaps?

I’m sure more will emerge about this and we’ll certainly keep an eye on how it works out. There are of course potential pitfalls as well as the obvious attractions. For instance, if IBM takes the Emptoris suite further into SRM and supplier collaboration (building on their contract management and supplier lifecycle management capabilities), might that run up competitively against State of Flux’s own software product?

Anyway, some unanswered questions there, we’ll be back with more on Watson soon. And the overall message is that we’re going to see more activity from IBM in the procurement software market, and more innovation from the firm.

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