Home
 > Research and Reports > TEC Blog > Emptoris "Procures" Zeborg's Spend Management Expertise P...

Emptoris "Procures" Zeborg's Spend Management Expertise Part one: Event Summary

Written By: Predrag Jakovljevic
Published On: November 18 2003

Event Summary

The evolving supplier relationship management (SRM) market and its ever-evolving or emerging constituent parts like e-procurement, strategic sourcing, spend analysis and so on have lately shown great opportunities to the pure-play SRM vendors with genuine value prepositions. These have been seen in increased user awareness and adoption, certain venture capital investments in these days of scarce capital outside the trendy biotechnology sector, which then prompted geographic expansion and sporadic mergers of incumbents with complementary offerings.

Such an example would be Emptoris, Inc., a privately-held provider of e-sourcing solutions that support the strategic sourcing needs of global 5000 companies, which early in 2003 announced the completion of financing from new and existing investors totaling $20.5 million. Menlo Ventures led the third funding round, with participation from new investor HarbourVest Partners and all existing investors, including NETinvest, from previous two funding rounds. Emptoris then pledged to use the funds to finance further expansion of the company in a number of areas, including sales, marketing, product development, and penetration into new global markets.

Since its founding in 1999, Emptoris has quickly become one of the leading e-sourcing software vendors with sound technology that is used by numerous global 5000 companies across a wide range of industries, which include electronics, pharmaceutical, metals and mining, aerospace and defense (A&D), and financial services.

In September, Emptoris announced the acquisition of Zeborg, one of the world's leading spend analytics firms. As a result of the acquisition, Emptoris, with more than 50 global 5000 customers, and notable sourcing applications and services, believes it is now positioned as the leading strategic sourcing software provider in the procurement and sourcing applications market. In addition to acquiring Zeborg's software and services offerings, Emptoris will inherit the company's sales team as well as global 1000 clients from a wide range of industries, including seven of the world's largest banking and financial services companies. Zeborg's customers include American Express, Cigna, Fleet Boston Financial Corporation, KeySpan, and Owens Corning. Zeborg has reportedly processed over $480 billion in corporate spend data and over 350 million transactions from over 100 data systems. On the other hand, Emptoris customers include Boeing, GlaxoSmithKline, Motorola, and Samsung America.

Specifically, Emptoris believes it will benefit from the Zeborg acquisition in the following ways:

  • It should position Emptoris as the largest company dedicated to the strategic sourcing software market.

  • A broader market opportunity, a larger sales organization, and significant cross-selling opportunities to global 1000 customers means the company is well positioned to achieve over 50 percent revenue growth in 2004.

  • The addition of several marquee financial customers makes Emptoris the leading provider of e-sourcing solutions for the financial services industry.

More importantly, Emptoris believes its existing customers will also benefit greatly for the following reasons:

  • Tight product integration, expected to be completed over the next few months, will enable Emptoris customers to achieve additional cost savings by providing the ability, through one application, to identify and prioritize sourcing savings opportunities, develop best practice strategies to capture the savings, quickly execute sourcing activities designed to reduce the total cost of ownership (TCO) of goods and services sourced, and track compliancy to ensure savings are captured in accordance with corporate sourcing goals and policies.

  • Expanded sourcing domain expertise will enable Emptoris customers to achieve quicker return on investment (ROI) with turnkey sourcing solutions.

  • New technologies and an expanded development group will enable the company to maintain a functional leadership position and set new industry benchmarks that will drive incremental customer value.

The move comes after Emptoris announced in August that it had opened an office in Germany to support existing customers and offer its strategic sourcing solutions to companies throughout the country as well as surrounding countries in the region. The office will be fully staffed with sales, marketing and technical personnel and will be based in Berlin. Prior to that, Emptoris opened its European headquarters in the UK in 2002. According to Avner Schneur, President and CEO of Emptoris, the vendor has experienced tremendous growth in Europe over the last year through a number of customers wins with large European companies. In fact, today Europe represents 35 percent of the company's total revenue, which we estimate is in the range of $10 million.

This is Part One of three-part note.

Part Two will discuss the market impact.

Part Three will cover challenges and make user recommendations.

Emptoris Background

Prior to its new funding, Emptoris has done an impressive job of delivering sourcing applications in-house. Namely, at the end of 2002 it announced the availability of version 4.0 of Emptoris Sourcing Portfolio (formerly ePASS, which stood for Electronic Procurement Application for Strategic Sourcing), the company's web-based e-sourcing software suite. The Emptoris Sourcing Portfolio has been renowned for its event management, supplier enablement, and optimization-based decision support aimed at providing significantly shorter sourcing cycles and substantial bottom-line savings. Version 4.0 of the Emptoris Sourcing Portfolio, however, provided deeper and more flexible functionality through new software modules, including contract management, project management and supplier assessment.

By providing a solution that helps users manage the interplay between ongoing sourcing activities and contractual relationships, the Emptoris Contract Management module allows enterprises to:

  • Easily build complex multi-item, multi-term supply contracts with intuitive forms, menus, and instructional wizards.

  • Manage complex pricing arrangements, monitor supplier compliance, and leverage negotiated agreements to identify additional savings.

  • Decrease the time spent finding contracts, gain greater visibility into upcoming contract activities, and speed contract renewal and renegotiation.

The Emptoris Project Management module provides value-added task management for multiple parties during multi-stage sourcing by enabling users to define multi-step projects, define teams and assign roles, manage tasks through completion and save project-related information as templates. Key touted benefits of the project management module include:

  • Improved process repeatability and knowledge capture

  • Better management of the overall sourcing project schedule

  • Centralized control of all sourcing programs

  • Real-time data visibility

The Emptoris Supplier Assessment Module was designed to help category and supply managers assess the supply base and create performance scorecard data for use throughout the sourcing process. The module helps companies to:

  • Conduct better, quicker, and more cost effective supplier assessments

  • Assess supplier capabilities to meet ISO 9000 and lean manufacturing standards

  • Audit more of the supply base without increasing resource requirements

In addition, version 4.0 introduced the Smart Data Framework, a new technology that provides enhanced control and decision-making accuracy. It is a flexible technology infrastructure for defining all elements in the Sourcing Portfolio. Where other systems "hard-code" data for items or supplier bid forms, the Emptoris Smart Data Framework allows users to create their own definitions and forms "on the fly." Key touted benefits include:

  • More flexibility in defining goods and services

  • Greater ability to identify and compare supplier cost drivers and capabilities

  • Enhanced bid analysis by incorporating item and bid attributes into optimization constraints

In version 4.0 of the Sourcing Portfolio, Emptoris has also made substantial enhancements to existing modules, such as:

  • New buyer-side consoles with intelligent data display and alerts put critical real time information in front of buyers when they need it.

  • Enhancements to Emptoris' Decision Support Module, the industry's reportedly first bid analysis engine based on true optimization. Users can now leverage the smart data framework and offer advanced formula and reasoning capabilities, which makes it possible for customers to identify and realize even more savings.

  • The Executive Dashboard now includes context-relevant reporting, user-guided report creation, additional report templates, and improved scalability. The module is fully integrated within all modules of the Emptoris Sourcing Portfolio to offer complete data visibility and better decision-making.

  • Workflow and usability enhancements have been made to all bidding, negotiation, and decision-making modules to improve ease of use and navigation for both buyers and suppliers.

Partnership with Cap Gemini Ernst & Young

Not stopping short at delivering astute sourcing functionality, in March 2003, Emptoris also announced that it has partnered with Cap Gemini Ernst & Young U.S., LLC (CGE&Y), one of the world's largest management and IT consulting firms, to deliver Best Practice Packs that should enable companies to jump start their e-sourcing programs. A collaborative effort between Emptoris and CGE&Y, Emptoris' Best Practice Packs provide process, content and service support for sourcing specific commodity categories. By seamlessly integrating CGE&Y sourcing practice experience and services with Emptoris' best-of-breed sourcing software, the Best Practice Packs should provide the following benefits:

  • Increases speed-to-category by reducing setup time and leveraging sourcing expertise across all categories throughout the enterprise

  • Enables repeatable and measurable sourcing programs

  • Provides a baseline of documents and processes that should speed organization learning and best practices adoption

  • Improves an organization's capacity to strategically source more spend

In addition to providing specific content for the Best Practice Packs, CGE&Y provides standard services to customize and configure the packs to customers' specific sourcing program requirements. Standard services also include assistance with deployment planning, e-sourcing strategy and system rollout to speed up the implementation of the Best Practice Packs.

This concludes Part One of three-part note.

Part Two will discuss the market impact.

Part Three will cover challenges and make user recommendations.

 
comments powered by Disqus

Recent Searches
Others A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

©2014 Technology Evaluation Centers Inc. All rights reserved.