More on the Procurian / Accenture deal – talking to Mike Salvino

My US colleagues and I had a phone call with Accenture’s Mike Salvino, Group Chief Executive of Accenture Business Process Outsourcing at the end of last week.  (My ex-Accenture friend said “wow, they’re really putting the top people on this”, so I think we can assume he’s an important man...)

He was, as you’d expect, extremely bullish about the Procurian deal and seemed genuinely excited. He pointed out the was the historical links between the firms that we mentioned here, going back to the EPV and ICG Commerce days ten years ago or more. So Procurian has many “Accenture people” still around and Salvino was convinced there is still a great cultural fit. And he stressed that this “wasn’t a cost play”. There will be no merging of offices, relocations, headcount rationalisation. This is about a growth strategy.

He also pointed out some good fit in terms of relative market strengths - within procurement BPO, Accenture is particularly strong in financial services, whereas Procurian brings deeper expertise in consumer goods, media/communications and technology.

There are also some interesting issues around use of technology. Accenture has not focused significant effort in building a platform to deliver services with its own technology, relying in the main on SAP / Ariba in the purchase-to-pay (P2P) and supplier network area.   Historically, Procurian has its own sourcing operation and systems, but on the P2P side, it has worked with different customer P2P systems and multiple tools in other areas (e.g., BravoSolution for sourcing). Accenture has also worked with other application partners in the past, including sourcing optimization specialist Trade Extensions  and others.

So whilst existing customers aren’t suddenly going to be pushed into different offerings, changes in technology and so on, we suspect that over time, the approach to new customers will become more standardised in terms of process and the preferred technology platforms – whether that ends up being a home grown or third party preference.

I asked Salvino about Europe. Procurian have a fairly limited presence here, and Accenture, although they have a decent client base, have perhaps been over-shadowed in new business terms in recent years by Proxima and Xchanging’s growth.  “Europe is absolutely a key focus” - along with North and also (interestingly) South America, was the answer. “We think there’ll be some interesting opportunities for Procurian staff in Europe, given Accenture’s foot print” was another interesting comment.

My US colleague, Pierre Mitchell makes the point that Accenture in particular haven’t always been the most flexible outsourced service provider in terms of their offerings. And the Spend Matters view is that increasingly, buyers of these services are going to want that flexibility to pick and choose which services they take, how and when – something a lot more bespoke than the old “all or nothing” outsourcing model.  That’s a challenge for the new organisation – but one they’ve certainly got the potential to meet.

You can read more and more detailed / in depth coverage and views on our subscription site, Spend Matters PRO. But our overall take is that this is a powerful combination, likely to succeed, and one that without a doubt will cause other major players to reconsider their own strategies. However, whilst it creates a market leading competitor, firms like Proxima and Xchanging may also see the opportunity to present themselves as nimbler, more flexible competitors to the Accenture powerhouse. (And let’s be blunt – some senior execs just don’t “get” or like the Accenture style).  Interesting times, as ever...

Voices (3)

  1. Dhewii:

    Let us have a dose of reality here. First of all Collington was one of the Accenture crew that all ppoepd up around the time of watmore, hall, corruthers,d avies, ryder etc this is thieves the lot of them.Collington did internal procurement for accenture paper clips and bog rolls he was known for this in government he did a mean powerpoint though and that seduced the odd minister yes odd.He is a bully and there were serious complaints made against him to cabinet office hr swept under the table by none other than ??? watmore.

  2. Christine Morton:

    I’m part of BPO under Salvino’s team – and he’s right – we are nothing but excited about Procurian coming on board. Also – FYI – we absolutely DO have a customisable model so it’s not an all-or-nothing BPO service. Each one of my clients has unique challenges (I’m the Regional Category Lead for Contingent Labour) and so each one has a different solution designed specifically for them.

    1. PlanBee:

      That doesn’t sound particularly cost efficient.

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