Rearden Launches Deem at Work Platform and Suite For SMB Spend Control and Savings (Part 2)

Please click here for the first post in this series.

When users log-in to the Deem at Work platform, regardless of whether it is branded as Deem or a partner site, they are greeted with a simple search interface with the ability to query a range of categories including office suppliers, IT hardware, building/construction, safety equipment, janitorial supplies, office furniture, office products, and specialty supplies (e.g., restaurant supplies). The Rearden team vets all of the suppliers in the system to make sure they can "deliver on the fulfillment side" in a high-volume environment. To date, Deem is not allowing partners to differentiate through value-added services (e.g., allowing industrial distributors to deliver vendor managed inventory (VMI) programs alongside the deem platform). But they do allow providers to showcase significant attribute and SKU level information about their products.

Our initial view of Deem Purchase (the eProcurement application) is that the overall user interface is extremely intuitive and easy to use. But the elegant front-end belies a complex back-end with significant power to integrate the over 650,000 SKUs and details from network merchants. To date, these suppliers, all of whom have offered preferred pricing to Deem at Work members, include Office Depot, On Point Technologies (IT products), HD Supply, Intraline MSC Industrial, and RS Hughes. Other suppliers in the Deem at Work catalog provide coverage across a range of other areas.

Even before users are logged in, they see a navigation menu that allows them to move between different Deem modules and areas of spend, plus spend management support. In addition to the "Purchase" module, these tabs include Travel, Dining, Shipping and Overall Expense Management. Queries in the purchase module will quickly surface the negotiated Deem price (again before logging in). We tried this ourselves for one line item and found that the Deem negotiated price for an HP LaserJet Q6460AC toner cartridge was $129.39 whereas the price was $142.70. Of course users should factor in shipping costs (we did not), but overall, Deem is at least competitive on this one line item, if not slightly cheaper (even factoring in shipping for an Amazon Prime customer). Moreover, Deem is currently offering free shipping (yet it is not clear how long this will last for, hence the total cost calculation recommendation above).

Where Deem Purchase really begins to draw a distinction between itself and Amazon, however, is the fact that it really is a lightweight eProcurement toolset rather than simply an online shopping site. Users can, for example, add some limited capabilities around approvals, access levels, spending limits, etc. all tied to a single company or account. Soon, Deem expects to add further policy and configuration capability to its Purchase module (which it already has in Travel, for example). But already, the roots of a simplified free eProcurement system are embedded within it.

Moreover, financial services companies or merchants that provide Deem at Work to their customers can define various fields and capabilities. For example, MasterCard will only accept MasterCard through their site and can filter credit cards based on issuing banks. Any other Deem partner can enable similar controls to drive spending to certain cards, for example. To fund the Deem model, suppliers pay a percentage of the transaction value to Deem. This is in addition to Deem partners paying undisclosed fees for access and customization of the platform.

Still, the Deem business model is predicated on capturing percentage of the transactions flowing through the system. Ultimately, the solution execution here looks like a combination of Ariba (targeting the SMB market with greater category depth around travel and also a decent expense application) combined with an Amazon-type marketplace (but without internal warehousing and distribution). This is even if the distribution nuances (e.g., private label, not private label) may vary between marketplace co-brand and instance.

Ultimately Deem views itself as an intermediary that has created a set of underlying technologies built on a common service-oriented-architecture (SOA) platform. The current vision for this solution is squarely targeted toward the lower end of the SMB market but we believe it could scale up (into the true middle market) or down, into the consumer space. Unlike every other solutions vendor in this market with similar distribution power through its channels, Deem also acts as a content-driven intermediary, although the provider does not take title, as far as we know, to any items during a transaction.

In the next installment in this series, we will explore Deem's integrated expense management capability.

- Jason Busch

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