Procurement Solution Providers – How Much Do You Know About Them?

How did solution providers in the procurement industry whose shares are publicly quoted perform through 2014? Who is in trouble? Who is powering ahead?

If we asked 100 senior people in procurement that question, my suspicion is that no more than a handful would have any clue whatsoever. How did SAP shares perform? What about Xchanging or Accenture in the outsourcing world? How about smaller firms like Proactis or Hubwoo? (Did you even know that Proactis is a quoted company)?

OK, you say. It’s a fair cop. But really, why should I care about this? Does it really have any impact on me, even if I am a customer or potential customer of some of those firms?

Well, as a procurement practitioner it doesn’t matter too much if the share price of a firm who is a supplier to you (of procurement-related software or services) drops or increases a few percent. But if there are major moves, it can potentially change the way that the firm operates, either positively or negatively. And if a firm goes through a major change, whether that is bankruptcy, being acquired or even making major acquisitions, then of course that can have major implications for clients.

It all adds up to this suggestion – you should keep at least a fairly regular eye on the share price and related financial news for the firms in this market you work with, or might work with. And one way simple and effective way of doing that is through reading our Spend Matters PRO and Plus subscription services. (Follow the link for more information).

Plus is the lower priced of the two options, and includes regular articles and research around procurement technology, best practice, emerging thinking and trends. PRO is the higher level and provides deep analysis, particularly in terms of technology. If you are interested in the whole range of procurement and supply chain related tech, then I guarantee you will find more insight, analysis and useful recommendations in that field via PRO than you will find in Gartner or any of the other offerings from analyst firms. (PRO subscribers can access Plus material as well of course).

Back to shares, and one of the our regular features on Plus through 2014 has been our Spend Matters virtual stock portfolio. We have followed 21 quoted companies who are players in the procurement solution provider world, ranging from those who are solely involved in our sector (Proactis, SciQuest) to others for whom procurement is just one of a number of areas of interest (IBM, SAP etc). Every month we publish a review of their share prices and what has led to the major moves on the month.

We also put together a weighted portfolio – based on how significant each firm’s exposure to the procurement market really is – to arrive at our “Spend Matters Index”. Then, just to add some spice, my US colleague Jason Busch and I each then chose our own portfolio from these stocks, investing an imaginary $1 million each, to see if we could beat the index. Each month as part of the Plus subscription service, we report on progress of the overall index and of our own portfolios.

So for only a couple of quid a week, you can keep up with the latest in all those key firms – and there is lots more via Plus too. And tomorrow, we will take a look at how the portfolio performed this year. Which firm more than doubled their valuation? Who lost more than 80% of theirs? Which of the giants of the industry are worth billions less than they were a year ago? Tune in to find out.

Please note that we do not hold (or trade in any way) stocks and shares in any of the firms that form our virtual portfolio, with the exception of a few Xchanging shares in my SIPP, held since flotation! 

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