Scanmarket Announcement – eSourcing Pioneer Still Going Strong

Continuing our series related to recent announcements from major procurement software firms, today we will take a look at Scanmarket.

Now we should confess, we feel rather guilty. We’ve had over five years of Spend Matters in Europe, we've shaken hands with their people at eWorld, where they are always pretty prominent, but without going much further in terms of coverage of Scanmarket on our websites. Apart from the odd passing mention, we've never really got to grips with the firm, so we will put that right (to some extent at least) today with an introduction and a look at some recent performance figures.

And we have no excuse – the firm was founded in Denmark as long ago as 1999, the UK was their first export market in 2001, and Scanmarket was one of the very first firms to offer e-auctions way back in those veritable dark ages of procurement technology!  “We had no idea how much to charge for an auction”, says Ole Nielsen, the founder. “There was no benchmark or competition”.  Around a quarter of revenues still come from the UK and about the same percentage from each of the USA and the Nordic region.

The firm is still privately owned, with Nielsen very much involved. However, he moved out to Atlanta a few years ago to drive the US business, which has proved to be a successful move, as evidenced in their recent semi-public announcement (see below). The firm now has over 300 customers across 50 countries.

Back to that announcement in a moment - but just to continue the quick overview, Scanmarket offers a suite of products covering sourcing, spend analytics, project, contract and supplier management. They're not in purchase-to-pay - at the moment at least – but at times they have partnered with firms such as Wallmedien and BuyerQuest to offer the full source-to-pay capability.  The firm has over 200 clients, with a broad range of customers and particular strength in food & drink, including big names like Associated British Foods and BirdsEye. There is also a good spread of other industries from manufacturing to big-name retailers and some public sector clients too.

All the different modules offered are built on the same platform (although many customers don’t buy the whole range), so integration and flexibility are amongst the selling points and positives for clients, along with user-friendliness. Nielsen tells of a customer who found they could set up a complex RfP in the Scanmarket system in two and a half hours; it took a day and a half in a certain well-known market-leading procurement platform!

The recent figures released to analysts talk about growth of 100% year on year in the US and some 35% overall in 2015.  176,000 suppliers are now registered on platform, more than half of them signed up in the last two years and “unlike most supplier networks, nearly 40% of our suppliers are active on the platform”. Platform usage increased 40% through 2015, and the firm saw 29% growth in auctions – that’s interesting as some might see auctions as a relatively mature market and technology.

Southern Europe was another strength last year with wins in Italy, Spain and Portugal, and a new partner in Turkey chalking up some good wins too. In terms of the different capabilities, Contract Management was a particularly hot area. That’s encouraging as we have been going on about the need for organisations to take contract management more seriously for what seems like decades!

So, that’s it for today, but now we’ve got over that awkward first date, as it were, we’ll keep a closer eye on Scanmarket and what they’re up to.

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