Procurement News from the US — Weekly Round-Up

Apologies for my absence last week -- we were very busy getting up and running for a webinar that happened last Friday (with great success!) called “Quantifying Supplier Management Returns: Hard Dollar Working Capital Improvement and Beyond” with sponsor Aravo. Jason gave some background and a description of the current supplier management landscape (complete with a picture of a pimp) and then we were joined by Richard Stack, director of sourcing and procurement at Boston University, who talked about pushing the responsibility of data quality back to suppliers -- and saved $16 million in the process. Want to look busy at work for an hour? Watch the recorded event here. Want a copy of the slides so you can see Jason’s pimp and how it could possibly relate? Those are here. In all seriousness, it’s worth a watch -- great attendance and highly useful content.

SAP/Crossgate

Analyzing the SAP/Crossgate Acquisition: Customer, Product and Competitive Implications (Part 1) -- Last week, we covered the basics surrounding SAP's announced acquisition of Crossgate (slated to close in early November). You can read these posts here and here. In this post, we'll turn our attention to what the announcement means for customers and prospects (as well as future potential products), specifically in the area of procurement and supplier network connectivity. (Part 2 is here, where Jason looks at the competitive implications.)

Lots going on with Rearden.

Rearden Raises $133MM; But Funding Source and Bank P2P Potential Proves Most Interesting -- Last week, Rearden Commerce announced it had raised $133 million in funding in its latest round. By all accounts, this is a round that is at least 10 times larger than what we typically see for software providers in the source-to-pay area (inclusive of travel, T&E and related areas). Yet Rearden is not exactly your typical organization, and neither is its primary sales strategy. Even though they do have a direct sales component, their relationships with a range of banks and other travel partners are driving the real scale in customer acquisition. Perhaps this helps explain why their latest 9-figure round came courtesy of past investors including American Express and JPMorgan Chase and Citi, which joins this group of financial giants backing Rearden for the first time.

Will Rearden’s Acquisition of HomeRun Become the First B2B “Social Discount” Play? -- Amidst all the news coming out of SAP early last week with the Crossgate deal and a nasty head cold going around the office that's slowed the usual pace of developing current content, we've been slow to cover some major news at Rearden Commerce, including a large funding round and an acquisition. Last week, Rearden acquired a company that may not seem like a fit with the procurement or network space at first, but in fact, is quite a fascinating potential fit if they can successfully plug the capability into their platform and drive real adoption. The news we speak of here of course is Rearden's acquisition of HomeRun, a self-described "social-buying service" and platform which "powers group commerce programs for many of the best known consumer web sites," according to Rearden.

Goldman Sachs’ Euro/Dollar predictions...

Three Tips to Mitigate Foreign Exchange (FOREX) Risk in Procurement -- Last week Goldman Sachs came out with what feels like a rather conservative forecast suggesting only a slight decline in the euro relative to the dollar over the next 12 months (if the forecast proves accurate, recent volatility will mostly amount to temporary noise). According to the WSK's take on the forecast, "Goldman says it reduced the forecast because of increased risk premium being built into the euro surrounding the ongoing debt crisis in Greece and the threat of contagion throughout the currency zone." Yet, "the forecast calls for a strengthening euro because of ongoing broad depreciation pressure on the dollar, but starts at a lower base to factor in the euro's higher risk premium."

“Supplier Diversity”

Walmart -- Investing in Diversity (Women-Owned Businesses, That Is) For the Right Reasons -- When supplier diversity becomes simply a whisper down the lane, reporting exercise built around a check-the-box mentality for Federal reporting, it's pretty clear what the ultimate outcome of such programs will become. Namely, an internal bureaucratic compliance function, along the lines of financial/investment compliance, reporting in an investment bank or auditing firm. Which is to say, not exactly a strategic initiative. Yet when supplier diversity transcends bureaucratic reporting and becomes a means to reach new market segments (or appease other ones) it takes on a more strategic revenue role in the business. Moreover, if we expand the definition of diversity, taking into account smaller suppliers on a global basis, it can allow us to tap an innovation set that may be lacking with larger suppliers.

And in honor of making my boyfriend watch 24 Hour Party People for the first time last weekend despite owning a Joy Division Factory Records original pressing, here’s some jams:

- Sheena Moore

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