Emptoris and Xcitec; further thoughts

Emptoris announced earlier today their acquisition of Xcitec, a German Supplier Management solutions provider, giving them probably the broadest sourcing /supplier management offering in the market.  We made some comments earlier on the deal, but here we’ll cover a little more about Xcitec and their products and how they fit into the Emptoris range.

As we said, Xcitec has a strong position in Germany and with German-led multinationals, but are not well known further afield. Their client list is top-class within their market though - Deutsche Post DHL, EADS, Hochtief, Raiffeisen Schweiz, Siemens, ThyssenKrupp, Vodafone  etc.

The market they are in, whether we call it supplier information management (which we will), risk management or just supplier management, it is one of the fastest growing areas of procurement and supply chain technology. Gartner predicts annual growth of around 30% in this market segment, and that’s because major organisations have realised that;

  • If you can’t ‘onboard’ your suppliers easily into your systems, then lots of clever P2P or sourcing technology might be largely worthless.
  • If you can’t be confident that your suppliers are firms that you really do want to deal with, with the right capability, certification, capacity... then you have serious risk management issues.
  • If you can’t monitor suppliers’ performance, then you won’t get ongoing and improving value from your supply base.

While it is tricky to capture hard, tangible ‘savings’ from some of these factors, most procurement professionals now recognise the opportunity in areas such as risk management and supplier relationship management, so tools that can help across the whole lifecycle of supplier management are increasingly popular.

And that is what Xcitec provide – they cover supplier on-boarding, qualification, evaluation and risk assessment, performance management and development.  This enables users to manage supplier ‘master data’ across their enterprise, and have a transparent view of the supplier at every stage of the relationship with them, from when they first appear on the radar (perhaps as a contender in a sourcing event) through the active supplier period, where performance ca be tracked and developed, to finally ‘rationalisation’ (if that is ever appropriate!)

It’s easy to see how this fits with the core existing Emptoris product range, which focuses very much on two areas.  Firstly, the “Source to Contract” cycle, from spend analysis through eSourcing, auctions, optimisation, to contract and supplier management; and secondly, specialist category sourcing tools in spend areas such as telecoms and contingent labour.  So the addition of this supplier information management capability adds another dimension to the offering, giving the opportunity to manage the supplier (and the overall supply base) in a deeper manner than purely with Emptoris products (there is some overlap around suppler evaluation and performance management, but limited according to Emptoris sources).

So if you haven’t looked hard at supplier information management / risk management before, this may be a good trigger to do that.  There are other suppliers and approaches as always to consider; from (amongst others) the ERP providers, firms such as Aravo and SciQuest/AECsoft in the US, and of course Achilles, who we will be looking at in more detail next week.

In the meantime, Jason Busch at Spend Matters US has already posted this note on the Xcitec deal; and I have a feeling there will be more insight from him later, so if you’re interested do go back to Spend Matters US later today when he and the US generally are up and about!



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