Emptoris: Powered Up to Empower Global 2000 Users




Lately we have noticed some fierce competitors are partially diverging from their common focus to tackle different segments of the same broad market. One example in the supply chain management (SCM) space between RedPrairie and Manhattan Associates was described in our previous blog post.

Another example is Ariba and Emptoris, who still duke it out in software selections for spend analysis, contract lifecycle management, service procurement (including contingent labor), and strategic sourcing. But given Ariba’s focus on its multitenant cloud offering, Ariba Commerce Cloud, they do not often meet in the public cloud.

Emptoris remains content in its on-premise and private cloud (hosted) worlds, providing its large customers with tailored solutions that accommodate more involved “care and feed” processes that come with high-value and complex sourcing categories (versus straightforward catalog items and staples). Emptoris was a pioneer in the development and use of optimization technology in strategic sourcing (handling complex forward and reverse auctions, requests for proposals, etc.). Since its founding in 1999 it has evolved into a world leader in strategic supply, category spend, and enterprise contract management solutions that enable companies to maximize financial performance and optimize commercial risk. The company’s suite of award-winning and industry-recognized sourcing, contract management, spend analysis, supplier lifecycle management, services procurement, and telecom expense management (TEM) solutions are successfully used by Forbes Global 2000 companies. Emptoris is proud to provide solutions to industry leaders such as American Express, Boeing, GlaxoSmithKline, Kraft, Motorola, Syngenta, and Vodafone, to name but a few. Emptoris was recently acquired by IBM as possibly the final piece of IBM’s Smarter Commerce initiative (see the official press release).

2011 Expansion: A Spillover from 2010

The company’s bullish posture and growth in 2010, which were exhibited at its Empower 2010 user conference, continued throughout 2011. In early 2011, the company announced the acquisition of Rivermine, based in Virginia (US), a provider of TEM solutions that specialize in managing voice, data, and wireless telecom expenses. Rivermine’s solution is available as on-premise software or managed services (just as Emptoris’ other solutions are) to automate the telecom lifecycle. The solution includes contract sourcing, ordering, inventory management, invoice processing and auditing, wireless expense management, mobile device management (MDM), and reporting and analytics.

The Rivermine acquisition was similar to that of Click Commerce’s contract service and management business (formerly an Elance product), acquired in 2009 for services labor procurement. The rationale was to build Emptoris’ solution capabilities and value for customers, specifically to gain proven expense management technology in a significant services spend category, telecommunications. Emptoris is focused on helping companies with the “high-value, hard-to-manage” areas of corporate spend, and telecom is one of those areas. Patrick D. Quirk, president and chief executive officer (CEO) of Emptoris, spoke to the rationale at the time of the acquisition:

A core value proposition of Emptoris is its ability to help Global 1000 companies address high-value, but challenging spend categories in a manner that delivers meaningful bottom-line impact. A regular complaint heard from CFOs and CPOs is that their ERP systems are not fundamentally designed to manage these critical spend categories such as transportation, contingent labor, and services. The acquisition of Rivermine strengthens and extends Emptoris’ value proposition and competitive positioning by providing proven expense management technology in a significant services spend category.

What’s so Tricky about TEM?

A couple of breakout sessions at the recent Empower 2011 conference made clear just how difficult it is for any company to manage its wireless and landline (private branch exchange [PBX], voice over Internet protocol [VoIP], fax, phone card, etc.) telecom spend in these days of a mobile and telecommuting workforce with a proliferation of devices, including mobile phones, smartphones, tablet computers, ruggedized mobile computers, mobile printers, and mobile point-of-sale (POS) devices. The task of providing devices to employees and managing them is left to overworked and underequipped IT departments and in-house helpdesks.

Telecom spend is not only about whether billing and call accounting (e.g., call collection, rating, presentment/reporting, fraud detection, chargebacks, etc.) are correct, but also about asset management. Effective asset management means ensuring termed devices are canceled in due time, tracking orders, monitoring asset costs more precisely, and monitoring of overall accounts, plans, minutes, and charges. MDM software secures, monitors, manages, and supports mobile devices deployed across mobile operators, service providers, and enterprises. MDM functionality typically includes over-the-air distribution of applications, data, and configuration settings for all types of mobile devices. Major elements of MDM are as follows:

  • Asset management—to track devices and the key info stored on and about them
  • Provisioning management—to provision devices to connect to the corporate network for email, calendar, contacts, and other applications (whether by administrators or via self-service)
  • Security and policy management—to set policies for passwords, camera use, encryption, certificate, etc.
  • Application management—to provision and manage non–personal information manager (PIM) applications through an enterprise app store
  • Emergency services—to lock, wipe, and “kill” devices that are lost, stolen, etc.
  • Performance management—to provide the tools and data necessary to troubleshoot problems with mobile devices and their access to enterprise applications

Needless to say, MDM entails ongoing performance and management of services related to all of the above. This applies to both company-owned and employee-owned devices across the enterprise, as well as mobile devices owned by consumers. And what about tracking who is entitled to the latest-and-greatest device based on role and position (and who might inherit the old model)?

A TEM Spend Management Case Study

The Empower 2011 case study was presented by Fannie Mae, a government-sponsored enterprise (GSE) started in 1938 and chartered by the US Congress in 1968 as a private shareholder-owned company. The firm’s home office is in Washington, DC, with five regional offices and many remote workers (currently more than 9,000 employees and contractors). Each regional office has remote workers who travel extensively. There is also an extensive mobile workforce within the home office scattered over multiple buildings. The overall workforce is spread out over three distinct geographical areas, necessitating an extensive use of remote and telework options.

Prior to deploying Rivermine, Fannie Mae’s production support teams had to handle mobile devices that included Palm Treo devices, “dumb” cell phones, calling cards, modem lines, and pagers. Invoice payment was centralized, with no allocations to departments or units. Its wireless device support team had varying degrees of telecom expertise, and had the responsibility of providing help desk support among its other day-to-day functions (during standard working hours and where all reported issues required callbacks). The numerous day-to-day operations included the following:

  • Provisioning and terminating devices
  • Asset tracking
  • Approving requests based on policy
  • Management reporting
  • Invoice processing 
  • Juggling six wireless telecom vendors, each with different order forms and processes

With the ever increasing use of mobile devices, the Internet, and corporate networks, organizations that are more closely managing and monitoring this category of spend are amassing a treasure trove of savings, to the tune of millions of dollars annually. It is estimated that enterprises spend US$535 billion annually on network-related costs worldwide, with the average Fortune 500 company spending over $116 million per year. Leading analysts report that businesses have reduced telecommunications costs by up to 35 percent annually by implementing TEM solutions.

Fannie Mae now uses Rivermine for wireless expense management (including the wireless store) and help desk support. Mobile devices include BlackBerry smartphones, cell phones, pagers, and air cards. Fannie Mae now has centralized invoice payment with cost center allocations, increased savings with Rivermine wireless optimization and audit, effective management of terminated assets, and regular review of account plans and costs per minute.

Rivermine’s wireless device help desk provides domestic off-site call center support with enhanced telecom expertise, focused support, 24-7 availability, and increased first-call resolution. In turn, Fannie Mae’s smaller internal team has fewer day-to-day responsibilities and can focus on more strategic and project-based duties. The company now manages simplified standard plans with four wireless telecom vendors (using a single and simple order process for all vendors). The new help desk includes its own ticketing and survey infrastructure and is a single point of contact for the full spectrum of support (from initial order to contract termination).

Key newly instituted monitoring tools start with the audit report, which identifies underused assets, incorrect plans, erroneous charges, and charges that are not compliant with the contract terms. The optimization report recommends optimal minutes to minimize costs, and tracks vendors’ overall cost and usage. Finally, the key performance indicator (KPI) report monitors overall per-device costs, monitors equipment and other expenses at the macro level, and displays cost information to do easy comparison between vendors.

Expanding from SRM to SLM

In May 2011, Emptoris acquired Xcitec, a leading provider of supplier management solutions headquartered in Munich, Germany. As Bob Ferrari has described, Xcitec’s market visibility has been primarily in the European region, where it has targeted and assumed 36 percent of DAX-listed companies. This provider has garnered recognizable manufacturing and services customers, such as BASF, ABB (which was the subject of the keynote case study at Empower 2011), Deutsche Telekom, Deutsche Post DHL, EADS, ThyssonKrup, and Siemens, among others, many of which share a large global supplier base with over 100,000 users.

Xcitec solutions can be deployed in either an on-premise or software-as-a-service (SaaS) model, but the current majority of installations are on-premise deployments. The technology platform is service-oriented architecture (SOA) and Web-services based, and the solutions boast integration with SAP enterprise resource planning (ERP) backbones via both supplier and purchasing portals or through the SAP Enterprise Portal. Xcitec has also achieved Powered by SAP NetWeaver certification.

Xctitec has since been renamed Emptoris SLM and promises comprehensive management of the entire supply base. While traditional supplier relationship management (SRM) deals with supplier evaluation and development in the post-contract phase, service lifecycle management (SLM), as its name suggests, is about evaluation, risk monitoring, and remediation of all strategic suppliers—from onboarding or registration and classification to established trade relationships (and occasional terminations).

Strong- and weak-performing suppliers can be identified via supplier rating systems that leverage both objective and subjective information (see figure 1). The goal is to obtain a cross-organizational view of a supplier’s performance and to execute category-specific evaluations and analyses. A secondary goal is to grow a qualified supplier base (i.e., cooperate with proven suppliers based on the minimum necessary qualification criteria) and remediate suppliers that pose a risk to the supply chain by defining programs with pertinent goals and progress-tracking capabilities.


Figure 1

Catch Them Young

As mentioned earlier, SLM adds the pre-contract relationship phases to SRM, starting with initial supplier qualification (which comes right after potential supplier registration and assessment). The idea is to maintain one “portal” for all suppliers for their registration and onboarding, whereby they must go through a questionnaire-based supplier assessment process. Lower maintenance costs come by allowing new suppliers to fill in or update questionnaires on their own (self-service). The portal can enforce compliance with corporate standards by collecting and maintaining certificates. In a nutshell, the portal application helps with finding the right suppliers for sourcing, conducting detailed purchasing market analyses, and benchmarking new suppliers against market standards.

Once new suppliers have been registered, the next phase is their classification (categorization or segmentation) to identify high-impact suppliers based on their profiles. The goal is to provide cross-organizational transparency with regard to supplier importance and the ability to view and assign classification by organization and category. Logically, resources should be directed towards strategically more important and preferred suppliers. This phase should help companies define standard strategies to manage suppliers and associate appropriate programs with supplier classification.

Identifying supplier risks as early as possible in the lifecycle is critical. Thus, the next phase, prior to a contractual relationship, is to define risk indicators for suppliers, material groups, and regions, and to secure the process for identifying, evaluating, and controlling risks. The aim is to analyze risks in real time via an active purchasing risk formulation that defines measures for risk avoidance, reduction, or acceptance. Risks can be mitigated via an advanced decision support system, whereby KPIs are integrated as an early warning “traffic light” graphic system based on economic information, United Nation (UN) indices, etc. (see figure 2).


Figure 2

Once these pre-contract phases of SLM are accomplished, it becomes much easier to continue with the “traditional” SRM activities of nurturing the company’s active supplier base. The noble goal is to have up-to-date profiles and certifications for all suppliers, including the so-called “long tail” (less important and more casual) vendors. But gathering and maintaining certifications entails the following ongoing tasks:

  • Ensuring compliance with policies and standards
  • Segmenting suppliers to identify risk exposure and risk management requirements
  • Regular monitoring of performance and contractual obligations
  • Real-time tracking of supplier risks to identify potential supply chain disruptions or supplier failure
  • Implementing remediation programs to prevent or react to supplier failure

Why Bother with SLM?

The proper use of SLM solutions such as those by Xcitec (and now Emptoris) can result in multiple benefits, starting with financial benefits from ensuring that purchases go to the right suppliers. Some companies have reported tangible cost reductions and have increased savings by 12 to 20 percent. Dealing with a smaller number of preferred suppliers that in turn are awarded higher volumes can improve supplier pricing by 10 to 20 percent.

Moreover, the ability to manage supplier risk ensures the compliance of corporate policies and standards as well as managing cross-organizational risk exposure. Supply assurance programs can avoid supply disruptions and reduce the impact of disruptive events. Some companies have reported reduced supplier crises by 10 to 30 percent, and reduced catastrophic failures of their supply base down to 2 percent only.

Productivity improvements can come from assured synergies between different lines of business (LoBs) in an enterprise, a high-performing supply base, and reduced complexity and number of supplier relationships. Emptoris touts the following figures: improved on-time delivery and quality by 15 to 40 percent, increased coverage of the viable supply base by 30 to 50 percent, and savings in time and labor of over 30 percent in capturing and communicating supplier performance. Last but not least, there are potential qualitative (intangible) benefits from developing a more innovative supply base and taking advantage of supplier innovations and product improvement suggestions.

Enter Strategic Supply Management

Emptoris’ acquisitions of Rivermine and Xcitec have allowed the company to continue its strategy of supporting high value and complex sourcing categories. With these two acquisitions, Emptoris has created a company with a suite of six strategic solutions, more than 350 Global 1000 customers, over 725 employees globally, and combined projected annual growth in excess of 20 percent. The aforementioned acquisitions helped Emptoris deliver Emptoris Suite V9 at its Empower 2011 conference. Emptoris Suite V9 is hailed as the industry’s most comprehensive solution for strategic supply management (SSM).

Emptoris Suite V9 is an open strategic platform that spans the global enterprise and connects disparate systems to provide more complete visibility and control over spend, contracts, service providers, and supplier intelligence and processes. Suite V9 is the next evolution of Emptoris’ supply and contract management solution suite for Global 2000 organizations, with capabilities designed to maximize operational and financial performance and actively mitigate risks. The suite addresses the who, what, and how aspects of SSM via the following capabilities:

  • Who—supplier onboarding, classification, and risk management
  • What—sourcing, contract management, category spend management, service procurement, and TEM
  • How—supplier performance, supplier development, and spend analysis

Emptoris’ Customer Loyalty Program, whose goal is to ensure and measure the success of customers’ SSM programs, has recently completed 203 return on investment (ROI) assessments of Global 2000 companies. Those assessments indicate that companies leveraging SSM solutions achieve better than 99 percent spend visibility, confirm 90 percent of contracts under active management and compliance, and secure an average of 11 percent savings on total sourced spending.

Emptoris Suite V9 Unveiled at Empower 2011

The Emptoris Suite V9 includes a plethora of new and enhanced capabilities starting with user experience and adoption. Emptoris has invested in an intuitive interface designed to improve the user experience and drive increased adoption—and new capabilities to allow users to “work the way they work.” All of these enhancements aim to ensure that entire organizations can collaborate more efficiently across global teams and solutions. Specific user experience improvements and capabilities include the following:

  • New Mobile Specific Functionality: Emptoris solutions and capabilities are now available for the Apple iPad and a wide array of mobile devices, to support remote access to critical data for global and mobile teams, especially in the realms of services procurements and contracts. 
  • Enhanced Microsoft Office Integration: The Emptoris Suite now includes tighter and updated integration with the latest versions of Microsoft Office solutions, including Excel 2010 for easy download or upload of sourcing event data, as well as Word 2010 to create, edit, and negotiate contracts while still maintaining contract controls.
  • New Streamlined User Interfaces (UIs): Emptoris Suite V9 has a new streamlined and simplified look, feel, and function across the suite, which caters to occasional and novice users while still providing advanced SSM capabilities.
  • Broad Browser Support: Emptoris now supports all major Internet browsers including Internet Explorer (IE), Firefox, Google Chrome, and Safari, with no browser plug-ins required.

Program Management as SSM Glue

As procurement professionals need to improve productivity and actively monitor savings goals and budgets, develop and assign KPIs, and measure and report on results, Emptoris Suite V9 introduced a new Program Management solution. The solution is designed to manage the full lifecycle of procurement and savings initiatives for global organizations. By linking applications and business processes, Program Management enables enterprise-wide transparency and controls, while ensuring adoption of the initiatives.

Emptoris Program Management offers greater control, governance, and guidance of programs and major category initiatives via cross-suite dashboards, task management and tracking, workflows, and reporting. Similar functionality has long been in the Sourcing module, but the program management solution has the following distinguishing traits:

  • It is designed on a new technology platform.
  • A layer above the suite has a flexible model that can adjust to any business process.
  • It has a more robust workflow engine, with a graphical UI that performs functions such as branching logic etc.
  • When users don’t know where to start, it allows users to start a new process.
  • It has better team- and role-based assignments.
  • Attachments can be added to either milestones or tasks.
  • It has better dashboards and metric reporting, e.g., cycle time reporting.

The Program Management solution caters to the needs of project management (e.g., initiative savings tracking, issue tracking, create project templates and teams, define project teams by role, such as users, groups, business units, etc.), task management (e.g., assign task by roles, assign rules, task and/or team notifications, task durations, task tracking by task or milestone, automatic tracking on/off/in jeopardy, automatic adjustments of task scheduled start dates, etc.), savings tracking (e.g., record savings achieved by project or task, automatically calculate annualized spend/savings, submit savings through an approval workflow, automatically roll up approved savings to the project level, etc.), and issue tracking (e.g., track issues/risks at the program, project, or task level; automatically adjust task status based on issue/risk severity; prevent tasks from closing with open issues; etc.).

All of these capabilities are backed up by a number of contextual dashboards and reports (see figure 3). Emptoris Gateway is the brand new technology layer that enables cross-solution navigation and easy access to critical information in Program Management, role-specific dashboards, and reporting. The tool enables collaboration with internal and external stakeholders via dedicated communities, group portals, and workspaces.


Figure 3

As one concrete example of good program management use, for most Global 2000 companies, there can be hundreds of indirect requests where users are procuring products and services that are not catalog-based. Depending on the size of the organization, these requests can number in the hundreds per week. In this scenario, procurement departments have no visibility onto these rogue and maverick requests to help provide guidance, compliance, and consolidation with common requests. To address these global request challenges Emptoris Suite V9 provides the following:

  • A request-funneling process that properly categorizes the request, provides request guidance, and routes the request for review
  • Access to review workspaces, with integrations to events and dashboards for monitoring and reporting

Other Enhancements

Emptoris Suite V9 introduced new comprehensive suite reporting capabilities that provide visibility and intelligence across a company’s spend, sourcing events, contracts, and suppliers. The new Enterprise Intelligence capabilities include the following:

  • Emptoris Suite Reporting: Cross-suite reporting across Emptoris solutions based on the SAP BusinessObjects solution.
  • Executive 360° Reporting: A complete executive view of supplier data across systems and the enterprise (also available for iPad).
  • Virtual Supplier Master (VSM) with Supplier Discovery: A global master repository for supplier information and flexible supplier discovery capabilities that allow the enterprise to integrate with preferred third-party content providers. This new solution, which complements any master data management system, provides the ability to easily aggregate, maintain, and manage supplier data and intelligence, enabling informed decisions about the supplier base.

In other words, Emptoris VSM is the backbone of the suite that provides links to solutions to provide a complete lifecycle view, integrates data feeds to provide up-to-the-minute information, and normalizes and synchronizes info across enterprise systems. In addition to being a master repository for supplier info, VSM provides a global category master and ensures consistency across solutions. A single virtual supplier master makes it easier to drill down into contract and spend data and gain actionable insights. With no single master record (or repository), it is hard to track activity with multiple vendors with multiple records. In this all-too-common situation there is no validation of vendors, there are no consolidated views of spend per vendor, and companies are unable to properly diversify their supply base.

VSM can locate new suppliers and enrich existing supplier data from the company’s business records by using external discovery services such as Equifax credit monitoring and Dun & Bradstreet reports, North American Industry Classification System (NAICS) codes, Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) directives, etc. This way the solution creates a flexible environment that supports supplier compliance, risk, and corporate social responsibility (CSR). Suppliers can be mapped to multiple category schemas. Role-based security and configurable workflows ensure data governance, while configurable matching algorithms prevent record duplication.

Back to SLM, TEM, and Services Procurement

Emptoris Suite V9 helps companies actively mitigate risks by tightly integrating the aforementioned SLM capabilities with the rest of Emptoris suite. The SLM integration facilitates the following:

  • supplier selection and rationalization 
  • the application of business principles and controls across suppliers 
  • native iPad dashboard capabilities to identify and evaluate supplier risks and ensure compliance 
  • accountability through contracts and service level agreements (SLAs)

New TEM functionality includes budgeting and budget forecasting capabilities in terms of new methods to build budgets, the ability to tie budgets to actuals, and reporting. There is also a unified wireline-wireless portal with credit card support, while MDM services are tightly integrated with the user help desk. 

In the realm of services procurement, new flexible rate (flexi-rate) card structures ensure compliance (via granularity in budget management and enforcement of time entered against rates), greater visibility into bill rates and amounts, and the ability to capture costs in tricky environments such as warehouse facilities. There is an added flexibility to define any rate structure, and to define rate applicability both globally or locally. By using markups that can be flat amounts or percentage-based and markup cards that can be applied to many rate cards, and with the flexibility to define how markups are applied, companies can better know whether they are paying the correct markups to their suppliers.

In addition to its suite of SSM solutions, Emptoris also provides worldwide professional services to help companies drive adoption and expedite roll-out and impact of its solutions. The company has premier partner relationships with leading management consulting firms including Accenture, Deloitte, and IBM Global Services—only time will tell how these relationships will pan out following the IBM acquisition of Emptoris. The Spend Matters four-part blog series offers many more insights from Empower 2011.

A future article will present a question and answer session with Emptoris’ top executive on both the recent user conference and the future outlook under IBM’s roof.

Further reading
Jason Busch. Emptoris Empower 2011: Dispatch Four — Streamlining the User Experience With Some Fresh Interfaces. Spend Matters. October 27, 2011.
Bob Ferrari. Emptoris Acquires German Supplier Management Provider Xcitec- More Broadened Capabilities and Great Timing. May 4, 2011.
TEC. Are Spend Management (or SRM) Apps Suited for the Mid-market? – Part 3. July 20, 2009.
TEC. Emptoris: Opening a New Chapter of Prosperity. September 10, 2010.
TEC. Thou Shalt Manage (and Cherish) Thy (Best) Suppliers. November 12, 2010. 
TEC. Ariba’s 15-Year Journey into the B2B Commerce Cloud. June 17, 2011.

 
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