Iasta – getting on the sourcing bus

With our links to Spend Matters in the US, I've been familiarising myself with some of Jason's major sponsors of his blog, including Iasta.

They are a software and solutions firm with a strong growth record in the US, now beginning to put effort into replicating that in Europe.  They already have an interesting client base with around 30 UK customers, being particularly strong in the Transportation sector, with clients such as Arriva, Go-ahead, First Group...as well as Centrica and others.

I had a coffee with Stephan Steijger the other day, their European Support and Account Manager.  Stephan is Dutch and he's a procurement man by background rather than a techie or an IT sales type, which is always a good start for me.  Iasta started out with auction type products, then expanded through e-sourcing capability into Spend Analytics.  They offer a 'cloud' or 'software as a service' model, and are seeing strong growth; the need for procurement functions to show they are saving money in terms of their own operating costs while still generating wider third-party spend cost reduction is (as we've noted before) leading to something of a boom in this sort of product.

But there is still resistance internally in many organisations, Stephan says, not so much from the leaders and decision makers who see the benefits, but from both operational  procurement people who see automation as a threat to jobs, and users who may not understand the new disciplines and processes needed.  And ownership of budgets is another hurdle; often, procurement functions have very limited budget for technology investment, so the business case has to be made to finance, IT or business areas as well as to procurement.  Linking payment to return on investment is a trend Stephan sees as helping to overcome some of these budget issues.

One other interesting point Stephan made.  Apparently clients (particularly retail) are starting to look at Dutch auctions.  Here, rather than gradually reducing multiple bids over a period of time (as per the usual auction model), the price starts low, and increases until one bidder accepts the price.  And that's it! Auction over.  It's a bit brutal, hence perhaps the retail focus, but it's quicker than usual reverse auctions.  The 'game thoery' calculations for bidders must be very stressful - no second chances.

Anyway, another interesting option in this market and I'm sure we'll have more about Iasta in the future.

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