ICG Commerce – tackling audit services, and looking to Europe

We featured ICG Commerce last week following our visit to the US, and described how their depth of category expertise is a key selling point.  Kristen Knouft, their marketing VP, gave me a good example – audit services. It is a very specialist area, and one where the category manager can get very exposed with stakeholders, particularly if the internal Audit Manager is not too keen on procurement’s involvement, which is not an unusual situation.

But ICG have the scale to enable them to have deep category management expertise – basically, a small team who do nothing but look at audit services. And their strategy is a long way from the “beat up the suppliers and run an auction” approach which we criticised recently in the context of legal services procurement.

“When our people go to speak to the Audit Manager, their expertise and familiarity with the market is immediately evident” explained Knouft. “It’s not a rate card discussion or tactical price negotiation with the audit firm, it’s about making sure the number of hours look right for different elements of the process, or the balance between on and offshore work is appropriate”.

The result of this deep category expertise is - usually at least – happy clients and even happy providers, like the audit firms, who appreciate they are dealing with people who understand their business. .

ICG have also just announced a contract extension with Kimberly-Clark, focused on “Marketing Services, Corporate Services, Travel, IT, and MRO (Maintenance, Repairs and Operations). In order to drive incremental value in these areas, the joint team will focus on next-generation spend optimization strategies such as proactive cost management, policy optimization and collaborating with suppliers to drive innovation”.

So this sounds like a contract extension rather than an addition of new spend categories, but it’s good news to have such a big name showing confidence in you.

Kimberly-Clark are an example of ICG Commerce supporting European subsidiaries of US clients successfully – the next strategic question will be whether they can win business with European head-quartered organisations. They already have around 100 staff in Europe, in London, Prague and Bucharest, but their expansion strategy has led them to recently appoint Alun Baker, as their European MD. I haven’t met him yet, but he's got an impressive cv, with big jobs in the software industry behind him.   So watch this space – we will see and hear more of ICG I’m sure.

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