More procurement people moving into general management – catching up with Iasta

I caught up last week with Sean Delaney and Mike Pringle from Iasta, sourcing and spend management software providers. Delaney is the global VP of sales, while Pringle is running a chunk of continental Europe for the firm.  One immediately noteworthy point is that both worked as real, hands-on procurement practitioners early in their careers  – Delaney with Marks & Spencer, Pringle with United Biscuits. So they’ve proved that procurement executives can make successful general managers and indeed sales people, as their roles combine elements of both.

(Is this one of our problems in procurement? Do the people who have strong inter-personal skills and are good at selling and persuading all end up on the provider side of our industry? It’s a thought...)

Anyway, we have mentioned Iasta from time to time, but this was my most detailed discussion with them for some time. They offer a suite of spend management products, with strengths in eSourcing, from basic through to auctions and even the really complex stuff (decision optimization is their term, we call it “market informed sourcing”), spend analytics, contract and supplier performance management.

Delaney has been with Iasta since 2004.Whilst the firm is US based, he’s been instrumental in building their business in the UK, to the point where it represents around a third of the overall global business – an impressive percentage.  He’s now focusing on global sales –and “spending more time in airports than I used to”!

After a major internal review, their market positioning  has shifted somewhat over the last couple of years.  “We decided to target the tier of firms just below the very biggest.  So our approach, our pricing and our effort reflects that strategy”, says Delaney. He includes in that definition typically organisations with a third party spend from around £200M a year up to several £ or $ billion.

And at that level, Iasta believe that organisations have some particular challenges. They are clearly large enough for procurement to matter, given that sort of spend. But they may not be big enough to resource the function to the level that the mega-firms can.  And Delaney’s view is that there is a shortage of talent in the procurement profession, so again those firms have to work hard to compete for the best people against the BPs, Citigroups and Apples of the business world.

My first thought was that surely a firm with a couple of £ billion spend can afford a top class procurement function? But then I remembered my time as European CPO of the Dun & Bradstreet Group – at a time when D&B owned lots of different businesses, and had a third party spend in Europe of probably $1 billion or so. But procurement (where there was any professional presence at all) was devolved and dispersed around different countries, businesses and operations, whilst I was a one-man band trying to co-ordinate things. So, yes, I see what he means.

“These organisations need some help  - you can’t just stick in the software and let them get on with it”, says Delaney.

To respond to that, whilst Iasta aren’t going down a full consulting type route, they do stress their ability to make sure senior procurement clients have the right tools. “Our aim is to help solve procurement and business problems – we connect the CPO with the CFO using our solutions and business intelligence”. So there’s a strong focus on customer success, and working closely with the CPO (or similar) to drive user adoption of their “easy to use” software.

Other market developments have also left them in a strong position. The Ariba and SAP tie up, and Emptoris being bought by IBM, has left Iasta as one of a dwindling number of independent but still international players, along with BravoSolution and perhaps Zycus. (There are strong national firms – b-pack in France, Gatewit in Portugal, Onventis, Wallmedien and Pool4Tool in Germany – but fewer with real international reach).

Iasta are still privately owned by the management, appear to be financially solid, and are expecting growth of around 20% a year in the near future. I haven’t looked at their software in detail, but my US colleague and tech guru Jason Busch has, and rates it highly. So if you’re in that right tier of firm in size terms, and in the market for spend management solutions, they’re certainly worth considering.

 

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