Spend Matters PRO Insight: GEP, Supplier Diversity, and Wondering if the SAP/Ariba Deal Will Close

As you read in this morning's earlier post, we've put a lot of thinking into what's going on with Spend Matters PRO. But enough with the business model. Let's talk about PRO's real strength: the content. Last Friday, we posted a round-up of all SAP and Ariba coverage we've put together, including regular Spend Matters as well as PRO content. But that's only the beginning. Here's a list of the rest of the in-depth analysis and technology coverage that's currently available to PRO subscribers:

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The big question on everybody's mind...
Will the Ariba/SAP Deal Close? What Customers, Prospects, Competitors and Investors Should Consider (Part 1)

Question 1: Will the acquisition pass US Antitrust scrutiny, especially considering the network component of Ariba and SAP's current customer use of partner networks that will likely change to a combined SAP/Ariba network? The Clayton Act, which covers US Antitrust standards, suggests that "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly"...[continued on PRO]

Question 2: Will Oracle, IBM or others launch a competing bid for Ariba?

There has been a lot of chatter in the market around Oracle launching a competitive bid for Ariba. However, based on the board-level risks involved in any type of M&A transaction involving public companies in the first place (e.g., Director liability), it is highly unlikely that Ariba or its advisors didn't shop this deal. Morgan Stanley represented Ariba in this transaction, as it previously did in the Quadrem acquisition -- to other potential suitors. Of course this does not at all remove the possibility of a bid from Oracle or others (including IBM)...[continued on PRO]

Question 3: Will pre-deal closing customer activity (or changes in customer activity) have an impact on ultimate closure or immediate post-merger integration efforts?

The past two weeks have already seen a number of deals where Spend Matters PRO research suggests that certain prospects evaluating Ariba have turned in other directions based on the uncertainty over the current transaction, plus perceptions that would make working with SAP difficult (e.g., Oracle/PeopleSoft customers that were considering Ariba before are now looking at other options, even if this concern is unfounded for pragmatic product reasons). At the same time, some of the most inclined to work more closely with a combined SAP/Ariba in expanded areas (e.g., SAP customers and especially, current Ariba/SAP customers) are taking a...[continued on PRO]

PRO SAP/Ariba questions on deck for next week:

Should we believe claims that Ariba and SAP competitors are making in the market to customers and prospects at the moment? What are these claims?

Is the Coupa patent litigation likely to impact the transaction (and is there a possibility the transaction is likely to impact the litigation)?

Are there historic parallels (i.e., past deals) we can turn to as lessons in this transaction?

Is there a probability that we will see short-term tuck-in (or related transactions) deals announced by SAP?

How will competing providers react from a deal standpoint prior to deal close and could this impact deal closure (e.g., timeline, post-merger integration planning, etc.) in any way?

Jason talks Big Data.
The Meaning of Big Data for Procurement and Supply Chain: A Fundamental Information Shift -- Spend Matters PRO readers are likely to be at least familiar on a cursory level with the term "Big Data." Big Data has come to mean different things to different people (and groups) within companies. For IT organizations, Big Data often represents the confluence of different sources of internal systems information needed to make better and more rapid business decisions. But most important, for IT, Big Data, at least as they see it, is a technology problem that IT deserves the first crack at getting their arms around – and owning...[continued on PRO]

Peter launches a series on the roles, aims, objectives, and priorities of CPOs and other procurement professionals.
What Keeps CPOs Awake at Night: How CPOs are Measured -- One of the paradoxes of procurement is that it is clearly so important to the success of most organisations, yet it is so hard to measure exactly what contribution it is making. Every procurement consultant or senior executive can wheel out an analysis that shows taking 10% out of the cost base, through effective procurement, will make more difference to bottom line profit than a 20 or even 30% sales growth. So the theoretical benefits of procurement are clear, but actually measuring whether that effectiveness is being delivered is an altogether more difficult task....[continued on PRO]

...and also discusses how procurement must "keep up with the market."
Procurement – Keeping Up With the Market (Call Centres, Sourcing Intelligence, and Beyond) -- When Fiona Czerniawska and I wrote our book a couple of years ago*, we were probably the first to cover procurement of professional services in such a detailed manner. That is partly because professional services (as a category to be addressed by procurement) are a relatively new phenomenon. It is only in the last ten years or so that procurement has begun to get involved – and in something around 50% of companies, according to the surveys, procurement is only involved tangentially if at all. Serious procurement involvement in marketing goes back a little further, but is still fairly recent in the greater scheme of things. So a key role for the senior procurement team, in large organisations particularly, is keeping up with changing spend patterns in the organisation in order to be equipped and ready to offer valuable services in those new spend areas....[continued on PRO]

Thomas wrote two wonderful pieces on supplier diversity.
Supplier Diversity -- Creating Shared Value for the Future of the Nation (Part 1) -- In November last year, we wrote about Buying Locally – a great segue story into a broad topic commonly rolled into a convenient bundle called supplier diversity and also a corporate activity that stirs up all sorts of emotions. Jason stoked the diversity fire with A Critical Topic for Black History Month: How Far Should Supplier Diversity Programs Go? in February this year. I think much of the controversy around this topic is based on lack of information and not enough perspective on the underlying drivers. Let me expand on that by quoting the famed Michael Porter – this is from Competitive Strategy, his legendary 1980 piece on the nature of competition: Part 2 here)...[continued on PRO]

And we conducted an in-depth interview with GEP and then wrote up a four-part Vendor Snapshot.
Spend Matters Vendor Analysis: GEP (Formerly Global eProcure) -- Part 1 -- Spend Matters believes that GEP has a broad suite with flexibility in deployment options. Modular rollouts with the ability to mix and match as needed (although with some modules as prerequisites for others) are supported. With the recent acquisition of Enporion, we should expect an enhanced GEP Purchase module before long ... [continued on PRO]

GEP part two...
Spend Matters Vendor Analysis: GEP (Formerly Global eProcure) -- Part 2 -- GEP -- Initial Solution Impressions. Slick UI -- We like GEP's user interface. It's fresh. The initial user dashboard uses a hexagonal grid to show enabled solutions/modules and how they connect around the core, the GEP Suite. User-specific content and feeds are on the lower left of the welcome screen, company-specific notes/broadcasts are on the upper left and GEP-focused content is on the bottom right. Once a company has more than a few modules it can be challenging to lay them out in a logical way, and we think GEP has done a good job with creatively coming up with a UI that we haven't seen before. There's a modern feel to the design and we find it intuitive...[continued on PRO]

I have to admit, as the editor of all this content, sometimes I got so engrossed that I forgot I was editing. The regular Spend Matters and Spend Matters UK blogs will still provide everything you're used to seeing -- but if you want to go PRO, now's the time to do it. The market has never been covered this way. Sign up and give it a whirl. If it's not for you, you can cancel your subscription with just one click. And if you'd like to explore more PRO options, including company-wide access and the chance to personally engage with Jason, Peter, Thomas, Richard, Lisa, Tom and the rest of the PRO team, we'd love to hear from you. Contact William Busch at wbusch (at) spendmatters (dot) com.

- Sheena Moore

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