Efficio, the procurement consulting firm, announced a strategically significant move last week with the launch of their Spend Analytics software product, “the first product in a suite of custom procurement modules that make up the proprietary technology platform eFlow”.
The firm, which has grown to around 250 people now, has been a fairly traditional consulting firm covering cost reduction, category management, procurement strategy and change management. But this takes them into a somewhat different space.
We spoke to James Jenkinson, VP at Efficio, to get some further insight into this development. He explained that the analytics product is the first of five modules which will form the overall platform. The others will be launched "over the next six months or so" and will include category planning, sourcing, supplier lifecycle management (including contract management) and performance management - savings realisation and supplier performance against contract.
Is there any intent to move into the P2P transactional management field, we wondered? No, Jenkinson says, although the performance management module does pick up line level detail from the client’s P2P system in order to track actual performance and pricing against the contract.
But why has Efficio taken this step - might it be a distraction from the core and very successful consulting business?
"Our consultants work with different spend analytics platform - I guess as consultants we are often using analytics in a pretty sophisticated way compared to many users, so sometimes functionality has been an issue for us with existing products.”
“We have also built a good number of bespoke applications in this and other areas as we look to solve problems for clients. So this seemed like a natural development”.
The economics of this also make sense for the firm, according to Jenkinson.
“We have also found that the cost can be prohibitive with certain analytics platforms when we want to make what seem like fairly small changes - to a dashboard perhaps. We felt that we understood what we wanted, and we need to be able to do things quickly to satisfy clients, so ultimately we decided it was better to build the solution ourselves ".
The first stage is to use these products in Efficio’s own consulting assignments - that was the driver really. “But we do then expect that some of our clients may want to continue using the products after our consulting assignment is completed".
But what about the next stage after that - providing the software as a stand-alone product and line of business perhaps - is that the natural development?
"That's not really our aim. We have ten clients signed up to use the analytics platform already - including Informa Group (U.K.), ICBPI (Italy), Accudyne Industries (U.S.) and Fujitsu (global). A major driver of this is to give us an advantage in the consulting business, and to help our consulting clients, so we don't intend at the moment setting up a separate software division or sales team solely to push those software products”.
An interesting step then – and another sign of a development we have seen for a year or two now, with solutions providers wanting to offer a combination of services, including consulting outsourcing, managed services - and
software to clients (see previous comments on GEP, Accenture, Xchanging amongst others). Genuine “solutions” in the truest sense, you might say, and we suspect this trend will continue into 2016 too.