POOL4TOOL: A Specialized Technology Solution for Industrial Procurement — Year-End Tech Review
This post is part of our 2016 Year-End Procurement Tech Review, in which we offer procurement practitioners a bird’s-eye view of some key vendors and their solutions in select categories. This week, we’re highlighting companies in the sourcing (including e-sourcing) and supplier management spaces.
The market for direct materials-centric procurement technology is just beginning to take off in North America (and other parts of the world, outside of Europe). Yet POOL4TOOL is one of only a handful of technology vendors developing specialized procurement solutions to support manufacturing environments. The Vienna-based procurement solution provider has extensive experience working with industrial firms (e.g., automotive, A&D, diversified manufacturing) across the source-to-pay continuum, especially in support of direct materials procurement activities.
- Founded: 2001
- Headquartered in Vienna, with American headquarters in Detroit, Michigan
- Has nearly 150 employees
- Annual revenue: More than $15 million (2016)
- Expecting to grow by at least 20% year-over-year for the next few years
- Provides services, including technical integration, installation, configuration and customization, as well as process consulting and direct material sourcing
Background & Overview
As a procurement technology vendor, POOL4TOOL is unique in that it is one of the only firms that has focused on supporting direct materials procurement activities throughout its history . However, it has evolved considerably from its early focus. What started as an “upstream” set of technologies (e.g., sourcing, total cost modeling, supplier management, analytics) centered on supplier relationship management and e-sourcing now offers a broader footprint that supports for the full procurement lifecycle, including transactional buying activities and supplier connectivity.
POOL4TOOL is privately held, though it received a minority investment from an Austrian investment fund in 2013. It has a considerable share of the German market (middle market and larger organizations), and it has been expanding throughout Europe and Middle East. The vendor offers a flexible delivery model that includes:
- Cloud-based licensing and deployment models
- Single-tenant “ASP” hosting and behind-the firewall on-site software
- Supplier connectivity solutions that can replace or augment existing electronic data interchange (EDI) capabilities
POOL4TOOL is based in Vienna, but it is making strategic investments in North America by expanding its Detroit office, investing in U.S.-specific sales and marketing, and making strategic hires.
The company’s e-sourcing platform has the majority of functionality one would expect from a sourcing provider, as well as capability that stands apart from competitors (e.g., bill of material support, total cost modeling, supplier performance and quality integration, etc.) The e-procurement modular capability also includes broad-based support, especially for a direct materials centric buying environment.
In short, the POOL4TOOL solution represents a true end-to-end procurement technology solution, specialized in supporting manufacturing operations, that starts at the RFP phase and manages spend, suppliers and direct material production inputs through sourcing, procurement, materials receipt and use.
- Fullstep (in Europe and Latin America)
- SAP Ariba
Commentary & Summary
Spend Matters believes that Pool4Tool has a bright future in supporting diversified manufacturing, automotive, aerospace and other companies that have sophisticated direct procurement needs and realize the capabilities that such a solution can bring over standard procurement suites. Having spoken with a range of POOL4TOOL customers and with those of competing solutions in the past 12 months, we believe the market for specialized manufacturing solutions that support the direct materials procurement lifecycle will increase in the years to come, especially in light of a newfound emphasis (given inflation and other trends) on managing total costs and commodity-based procurement activities.
For a more comprehensive analysis and guide for procurement organizations looking to understand whether they should consider adding the provider to their shortlists for consideration, please head over to Spend Matters Plus.
CORRECTION: An earlier version of this article incorrectly stated that POOL4TOOL had received funding from Amazon Web Services (AWS). It in fact received funding from Austria Wirtschaftsservice Gesellschaft mbH (aws) — Austria’s federal development bank.