Simfoni – Smart Technology Combined with Advisory Service

We caught up with Chirag Shah last week. He is one of the most interesting people in our industry; a Cambridge Engineering degree, a conventional supply chain start with Rover Group (as it then was) and AT Kearney; then a switch to the entrepreneurial life as a founder of e-auction pioneers Trading Partners.

After that, he built the very successful MarketMaker4 procurement technology business, selling it to Xchanging in 2014 and then becoming the Exec Director responsible for the whole Xchanging business in the procurement field. He left in 2015 before Xchanging got swallowed up by CSC (I suspect the full details will be in his autobiography one day) and last year set up Simfoni, with other serious procurement players like top consultant Stefan Dent (ex KPMG and PWC ) and spend analytics guru Philip Allouche (ex-Microsoft and Xchanging).

Anyway, over a cup of coffee in the excellent Costa in Covent Garden (declaration of interest; Whitbread shareholder speaking …) I caught up with progress over the last 12 months or so.

What is interesting about Chirag is his combination of strategic vision with a very pragmatic commercial acumen. So Simfoni is combining a proposition that includes some smart technology that they are developing themselves, plus service offerings that are more advisory / consulting in nature.

Some services are not even core “procurement” in nature - for example, Simfoni has one service line based on helping firms with their digital marketing strategy. We’re not convinced this is a long-term central element of the business vision but they obviously have some skills here, so they are helping other firms to improve their performance, including some in our industry (which they obviously understand).

In other areas, such as Spend Analytics and “tail spend”, Shah sees great potential. Analytics is the “key to Pandora’s box” as he says – or put it another way, it is like going to an expert doctor who does the diagnosis to tell you all the things you need to do to be healthy. Doing the spend analysis for firms is the key that then identifies the actions that need to be taken to deliver value.

What is interesting then is that Simfoni sits somewhere between a solution provider and a ”pure” advisory firm. Having identified the issues, Simfoni may look to provide some solutions itself, whilst recommending other providers for some areas. So the firm is working with partners in certain solution and geographic areas, as well as delivering services directly.

“Tail Spend” is worth considering in more detail. As most readers will know, we are talking about the high-volume, relatively low-value transactions and categories that every organisation buys. But these items incur high transaction costs relative to their importance, and leverage may well be limited. Shah tried to get Xchanging into this area; he has learnt from that experience and is having some success at Simfoni with the concept. “You need quite a range of capability within the technology platform to do this well – and it must be usable for non-procurement clients too”, he says.

Shah’s pragmaticism comes into play too when he talks about “apps” and mobile. That was very much core to the initial Simfoni visions but it  turns out not everyone is ready to go totally mobile. “We have had clients saying, this technology is great but do you have a desktop version”? So Simfoni responds to that sort of learning too. With Dent and Shah (most of the time) based in the UAE, there are already some interesting clients in that region, such as a major tourist board, as well as in Europe and the US.

Simfoni is still at an early stage of development, but is worth having on your radar given the pedigree of the founders. And we should say that we have a commercial relationship with the firm, although this is as always an honest view of where they’re at right now!

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