Procurement News from the US: Weekly Round-Up

I got a bit philosophical last week. Bear with me as I discuss the merits of coaching, being coached, and hating being coached.

New research and a case study!

New Research: Stop Waiting for a Supplier Network Revolution -- P2P, Supplier Management and Beyond -- Spend Matters is excited to announce the publication of our latest Perspective: Getting Past the Existential Connectivity Funk: Stop Waiting for the Supplier Network Revolution. Here at Spend Matters, most of our research titles are quite boring. But we hope this one caught your attention (give yourself some extra points if you already picked up in the literary analogy). We chose this title because in Samuel Beckett's Waiting for Godot, two chaps philosophize, debate and engage in quite a lot of self-pity while aimlessly waiting around for a figure they call Godot (who never in fact arrives). The entire play, depending on one's perspective, is an exercise in either rhetoric or existential thinking. But regardless of your vantage point, it's pretty clear that the protagonists accomplish just about nothing by the end. Inaction -- and the status quo -- end up ruling the day.

New Case Study: Pharmaceutical Company Drives Savings from Accurate Supplier Data -- Like most large firms that have grown by acquisition -- and hardly any haven't -- the supplier data floating around inside the organization reminds me of Samuel Johnson's quip about lies and the infernal side of statistics in that there is old data, missing data, or simply too much data. How would you answer these vendor-related questions?

This week’s acquisition commentary.

ThomasNet and Ariba Partner: A Minor Breakthrough in Network Cooperation (Part 1) -- Last week, Ariba and ThomasNet announced a new partnership to expose the ThomasNet directory of suppliers (paid advertisers) to buying organizations using Ariba Discovery. While terms of the deal were not disclosed around how ThomasNet Discovery suppliers will pay to show up in searches and respond to RFPs on Ariba Discovery -- let alone more complicated fee scenarios, such as when a supplier is a supplier on both systems but is discovered via a search on Ariba Discovery rather than the ThomasNet portal and must pay to respond to individual RFPs based on their lower-level Standard or Advantage-level membership with Ariba -- it's clear that the relationship came with some material forethought and technical integration between the two platforms.

Basware Acquires First Businesspost: Supplier Network Consolidation Continues -- 1stbp's 2011 revenue was right around EUR 2.4 million and the company showed EBITDA of EUR 0.5 million. Peter notes that "Basware have paid EUR12.2M including taking on some debt -- so that's some five times revenue they've paid, which is a pretty full price by industry standards." Let's hold that valuation thought for a moment -- actually a few days -- as we'll come back and explore it in the next post in this series. I agree with Peter that it's a relatively rich valuation on a revenue multiple basis, although the forward-looking PE is actually somewhat conservative by high-growth tech standards. But there's much more to it than that (we'll dig into this next week).

And then there was that NYT article yesterday...

Apple’s Supply Chain Transgressions: A Self-Directed Confessional -- While we've been critical of Apple in the past for not giving enough focus to the actions of its suppliers that violate Western cultural norms and laws (see stories here and here, just as a start), it's refreshing to see Apple come clean in its latest report and list of supply chain violation disclosures, including publishing its list of suppliers, an action which will give watch groups the upper hand in closer monitoring for future violations. In a recent wire story, Reuters did a solid job covering the basics, including noting the broader disclosure of 156 suppliers which "represent 97 percent of the company's supply chain."

Album I’m looking forward to: White Rabbits

NPR featured their new video for Heavy Metal from the upcoming March release.

-  Sheena Moore

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