Procurement News from the US – Weekly Round-Up

Though Jason was on your side of the Atlantic for the week, lots happened stateside. Let’s dive in:

More acquisitions!

KPMG to Acquire BrainNet -- Initial Reporting, Analysis and Recommendations -- On Friday, KPMG announced it was acquiring European-based procurement and supply chain consultancy, BrainNet. While terms of the deal were not disclosed, Spend Matters estimates the value of the transaction at between $50-100MM. This range is based on estimated BrainNet revenue slightly above $50MM -- which may have been even higher -- and relative 1-2X valuation ranges for professional services companies in the strategy and operations consultancy areas (although the recent Infosys/Portland deal was rumored to be at a higher EBITDA multiple than is typical for most consulting acquisitions). The bulk of BrainNet's revenue comes from applied procurement, supply chain and sourcing related work in German-speaking countries, but BrainNet does have other locations including China, Brazil Scandinavia, and most recently, the US.

This week in technology...

Perfect Commerce -- Driving Down a Commerce One Vendor Rationalization M&A Road -- Spend Matters recently had the chance to catch up with the Perfect Commerce team. It had been too long since we spoke to Hamp Wall, in particular, whose encyclopedic business knowledge of the history of Commerce One and the marketplaces it spawned is enough to make even us look like dummies (and we also lived through that error, mind you). Yet Hamp and his team aren't academics studying the history of B2B marketplaces. They're active consolidators of Commerce One business and networks that are still out in the market (and it helps that they own the code base, including the maintenance, upgrade and development rights for it). Most recently, Perfect announced it had acquired Supply Chain Connect (SCC), a provider that grew up of its ChemConnect roots and had rigged the old Commerce One stuff to work on direct supply chain connectivity and supplier management.

(We also covered GEP and Oracle Fusion Procurement over on Spend Matters PRO).

We continue our interview with BravoSolution’s Mickey North Rizza.

Mickey North Rizza -- An Interview: Looking Back, Accelerating Forward (Part 4) -- Spend Matters: This is your first time on the dark side -- within the provider world. You've been a practitioner and an analyst. Knowing what you know about consultants and software companies, how do you plan to be different in presenting and delivering the capabilities of Bravo? Mickey North Rizza: I don't think I plan to be different. It's more about moving forward and realizing most organizations need additional help beyond what they get from vendors and consultants today. This is lost on too many providers who rely exclusively on partners to push implementation alone, without a broader adoption and solution-embracing principal that makes a significant difference to the business. It's also why clients used to clamor to become part of the AMR organization. (Previous installment here)

Love the one you’re with?

eProcurement, P2P Surround Strategies: Getting More From SAP/Oracle/Ariba Investments (Part 1) -- Earlier this year, Spend Matters published a Compass Research Brief: "Surround Strategies" to Get More From Existing eProcurement and P2P Investments. It's proved a popular download from ourResearch Library and we've already presented some of the highlights of the paper on two webinars. Our concept of following a "surround strategy" is simple: leverage what you already have, augment, and improve (don't necessarily rip out). In other words, if you've made an investment in tools like Ariba Buyer, Ariba P2P, Basware (P2P), Oracle eBusiness Suite, PeopleSoft SRM, SAP SRM, homegrown P2P tools, and even core financials and direct procurement, it's possible to take what you have and deliver in incremental return on top of it.

Jason throws out some fightin’ words...

eProcurement Tools Aren't "Half-Assed" -- Perhaps Their Users Are (Part 1) -- As much as I like and respect Pete Loughlin (and continue to count him as a friend, colleague, and one of my favorite bloggers in the sector), I think he's wrong on one key point in the recent humorously titled post World class or half-assed? The current state of e-procurement. In looking at responsibility for the failure of P2P systems, Pete argues that we should look harder at providers and their sales tactics. He observes: "The e-procurement vendors' sales and marketing material will tell a very different story [than P2P nirvana]. They'll explain how corporate purchasing could be but it won't tell you what, in 9 out of 10 cases, it is really like." (Second part here)

What do you think of when you think of total cost-base management?

The Intersections of “Total Cost-base Management” (TCM) and Lean Sourcing (Part 1) -- Over on Procurement Leader's blog, Sammy Rashed of Novartis has been penning a great series about a range of procurement topics from an executive practitioner's lens. Most recently, he introduced us to the concept of Total Cost-base Management. As Sammy observes, "I've seen a growing number of companies moving to a more comprehensive method of managing costs, both internal and external. This approach looks at the entire spend base and creates a single organisation composed of the most important functions that can look at costs not just as discrete components but also as a system that drives demand and expenditure." (Part 2, too)

With that, I shall return to my ongoing summer routine of work, coach rowing, sleep, repeat...


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