Readers’ comments – on Oxygen Finance and blur Group

Some very perceptive comments last week, well worth highlighting here. Perhaps unusually, they picked up on a couple of our solution provider stories. Our piece on Oxygen Finance drew this from Secret Squirrel:

I remember one of their sales guys coming to see me a few years ago. The pitch was that I should negotiate a saving, pay the same price via Oxygen and get my saving back a few weeks later as a rebate. That would be good as I could prove the saving against the baseline which I couldn’t if I just paid a lower price.

And Fred Bloggs chipped in.

They’ve been going for several years, as you say, and have just a handful of not-very-big public sector organisations as clients. Lord knows how much cash they have burned. Why don’t you ask them a few questions about clients, delivered benefits, running costs etc and see what response you get?

It's a good point – I guess my view is that penetrating the public sector is tough, and whilst it has taken them a while, Oxygen deserved some credit for having some success now. In terms of how customers feel about it, good point, we will follow up on that, but certainly Oldham appear to be giving a decent customer reference. And I was pleased that Robert Moretti from Oxygen replied in person.

Fred, you are 100% correct in terms of how long the company has been going but the traction Peter refers to is that achieved in the last 18 months since Mark and I took up our positions. I believe that this is indeed significant and the feedback from our investors on the progress made is very positive. …the sales message is different to what it was and the value add is, we believe, a lot clearer. Even if the solution is still not for you we are always open to constructive criticism and would welcome it”.

I believe there has been a change of approach – Moretti has a pretty straightforward style, and as we said is getting involved in a hands on manner himself, so time will tell.

After our articles concerning the statement to investors from the blur Group, Nick Drewe of Market Dojo made some excellent points about the firm. This is just an extract – do read his entire comment here.

One thing that didn’t really come across in the Spend Matters coverage on the company is that the 20% commission on the project value is in return for their strategic sourcing services, i.e. approaching the market as a whole and qualifying suppliers against the specific statement of works, soliciting commercial offers from those suppliers, undertaking a scorecard analysis and compiling the individual pitches from each shortlisted suppliers. So there is a fair amount of manual work involved.

The challenge blurGroup faces in my opinion is how they demonstrate to their clients how they are providing best value. On the one hand, it’s clever that their solution bypasses Procurement, who tend to already have their own eSourcing tools & teams, and instead targets the individual departments, i.e. marketing, design, legal, IT, etc. Therefore the watchful eye of (Sauron) Procurement may not have this spend under their remit, and may not be able to ensure that the ‘market price’ for the services has been ascertained.

Spot on Nick – the 20% is arguably not unreasonable, but the devil is in the detail of what you get for your money. But 20% still seems high for major contracts. No procurement outsourced service provider I'm aware of charges anything like that for their services, so I do think blur will have to address that if they want to succeed in the 'enterprise' business.

Thanks as always to everyone who has commented – a very lively last week or two actually, much appreciated!

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