In Case You Missed It … Procurement and Supply Market Roundup

We can't comment on every press release that hits our desks, but here are a few market news stories this week that we thought we should bring to your attention, and some of our own you may have missed - we'll have more from our analysts in the coming days  ...

Councils Bringing Millions of Pounds of Services Back In-House

“After 40 years of awarding contracts to the private sector, insourcing is now the way for local authorities to cut costs and improve quality,” reports The Guardian. The Association for Public Service Excellence (APSE) has this week published a report which shows that 77% of UK councils are planning to bring services back in-house this year. It calculates that between 2016 and 2018, at least 220 local government contracts have been brought back into council control. Attitudes to ‘outsourcing’ are changing - “What we are seeing is a 40-year experiment in public service delivery being put under the microscope,” says Tom Sasse, a senior researcher at the Institute for Government. Read the story in full here.

Tesla Supply Side Controversy

French firm Lebronze Alloys says automotive maker Tesla still owes them $1.77 million for supplied parts for its electric vehicles after the Elon Musk firm “abruptly” halted existing contracts with them. The French firm is suing Tesla over “Breach of Contract, Breach of the Covernant (sic) of Good Faith and Fair Dealing, Fraud and Deceit; Demand for Jury Trial against Tesla Motors, Inc.” according to CCN. Tesla stock prices sunk to their 2016 level. Read more here.

Large-Scale Seller Reduction at Amazon Will Hit Smaller Suppliers

Bloomberg reports this week that Amazon, following a temporary halt on thousands of supplier orders a couple of months ago in what it called a “a campaign to weed out counterfeit products,” is now planning a purge on thousands of mostly smaller suppliers. “Amazon’s aim is to cut costs and focus wholesale purchasing on major brands like Procter & Gamble, Sony and Lego,” according to people familiar with the plan. “While the plan could be changed or cancelled, it’s currently moving forward,” they said. It’s one of the biggest shifts in Amazon’s e-commerce strategy since it opened the site to independent sellers almost 20 years ago. “This is the kind of change that will scare the living daylights out of brands selling on Amazon,” said James Thomson, who organises the Prosper Show, an annual e-commerce conference focused on Amazon. Read the full story here.

SolutionMap Personas in the Spotlight

Spend Matters has begun a series of personal essays on its unique solution provider rankings methodology SolutionMap - each analyst is outlining his favourite 'buying persona' (Nimble, Deep, Turn-Key, Configurator, CIO Friendly as well as Optimizer for sourcing providers and Global for CWS vendors). Read which ones Jason Busch and Pierre Mitchell have chosen here and here, and this week, Andrew Karpie choses his.

5 Government Bodies Account for About Three-Quarters of Cabinet Office £65m Brexit Consultancy Spending

The Guardian ran an exclusive this week about a leaked Whitehall document “Departments’ use of consultants to support preparations for EU exit.” It states that about £100m of public money has been spent on private consultancy firms recruited by the government to provide Brexit advice – and the figure is to expected to double. Of that amount five bodies, The Cabinet Office, The Home Office, The Border Delivery Group, The DHSC and Defra, account for £65m. 96% of that was spent on six consultancy firms. The growth in government spending on consultants has risen significantly from £513m in 2015-16 to £1.54bn in 2017-18. It is understood that the document is in draft, “meaning the final figures could be tweaked ahead of its official publication,” read The Guardian’s full report here.

Basware’s Customer Reviews In New SolutionMap Customer Insights

Spend Matters’ new Customer Insights report is a weekly summary of a provider’s customers’ reviews. In each report, it provides a one-page summary of qualitative — and select rating and quantitative — insights from the SolutionMap peer review process. The Customer Insights summary includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths. (The users’ names and companies are kept anonymous.) Last week it focused on Ivalua and this week on Basware.

Amazon Business Takes Important Step Into UK Public Sector with YPO

The YPO contract with Amazon Business is up and running. The two firms have agreed financial terms and have entered into a four-year agreement worth up to £400 million. “Similar to efforts in the US, where the General Services Administration is trying to set up an e-marketplace model for off-contract indirect purchases, the YPO Amazon Business Public Sector Digital Marketplace aims to give procurement managers a handle on ad hoc spending that falls below the stipulated EU thresholds,” global business supplies industry hub, OPI, reports. Read more here.

50 To Watch to 50 To Know Jumpers

The Spring, Spend Matters launched its celebrated ‘50 Providers To Watch’ and ‘50 Providers To Know’ lists. Every now and again a provider makes the leap from the ‘to watch’ list to the ‘to know’ list. That leap signals they are not only bringing innovation into procurement but leading the way in how we do business for the better. This week we highlight State of Flux.

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