Talking to an Emptoris Exec Post-Empower 2011 (and Pre-IBM 2012)

I recently published a TEC article about my attendance of Emptoris’ Empower 2011 user conference this past fall. What follows now is my deep-dive interview with Terrence Curley, Senior Vice President (SVP) of Product Strategy and Development at Emptoris, with the idea of developing some of the main messages from the conference.

During this past year, with the acquisition of Rivermine, the telecom expense management (TEM) solution provider, and of Xcitec, the supplier lifecycle management (SLM) solution provider, Emptoris remained focused and opportunistic on expanding in ways that should benefit its global customers and expand its solution capabilities in strategic supply management (SSM). The vendor has done this strategically through acquisitions – as with Rivermine and Xcitec – and organically, as demonstrated by its investment in the Emptoris Suite V9 expansion.

In the meantime, Emptoris was acquired by IBM in late 2011. Until that transaction is finalized, both parties are legally limited in what they can say publicly, and they defer to the official press release. I will venture a guess that Emptoris will likely be a part of IBM’s Industry Solutions, with cross-industry applicability. Certainly, Emptoris should be a critical piece of IBM’s recently minted Smarter Commerce initiative.

I concur with Lora Cecere’s report on the recently held Retail's BIG Show 2012 by National Retail federation (NRF). The event largely focused on the consumer-facing "front end" of the retail value network. The expo booths competed heavily on customer analytics (including Web analytics and marketing campaigns), social sensing, clienteling, cross-channel order management (capture and fulfillment), store workforce management (WFM) and operations, space planning, and mobility.

With honorable exceptions for a few fashion product lifecycle management (PLM) and sourcing providers, the event was conspicuously silent on the role of the supplier in driving effective response to demand. There were few technologies to support the building of effective supplier networks, supplier early risk sensing, recruitment, and management, and improving corporate social responsibility (CSR).

Thus, Emptoris should come in handy to the IBM Retail Framework (and other industry frameworks for that matter). More than 350 Fortune 1000 and Global 2000 companies rely on Emptoris for strategic spend, supply and contract management solutions. The company has more than 750 employees globally.

Emptoris Speaks Out

Terrence Curley is responsible for product strategy, product management, product development, and cloud operations. In this role he works closely with customers, industry leaders, and business and technology analysts to define and deliver all major components of the product lifecycle — from strategic conception thru development and quality assurance to customer delivery. Curley has over 20 years of experience in software implementations and company operations and 15 years specifically in the supply chain industry. My questions and Curley’s responses are as follows:
PJ: What is the current breakdown of customer numbers per your major product lines: spend analysis, contract management, strategic sourcing, supplier lifecycle management (SLM), service procurement, and telecom expense management (TEM)?

TC: Emptoris Contract Management and Emptoris Sourcing are the company’s leading solutions, however more than half of customers leverage multiple solutions or the full suite. We have seen a strong trend towards new customers purchasing the entire suite, and our existing customer base who may have purchased one or two solutions typically are on a “Journey to Procurement Excellence” and add additional solutions to their suite over time. Of course, with the acquisition of Xcitec, we expect SLM to become a staple of our suite, and expect to see demand for that solution on par with the Sourcing and Contract Management Solutions.

PJ: Which of the above product lines has been selling best of late, and what do you expect in the future along these product lines?

TC: Emptoris Contract Management has received the highest demand in the last two years, while Sourcing and Spend Analysis have continued to maintain steady growth. We expect SLM to have similar strong demand in 2012 and beyond.

PJ: I saw your press release on the new mobility capabilities for your services procurement module. Why in this module first, and what about mobile-enabling other product lines (i.e., where else do you see mobility as a major factor)?

TC: When reviewing the profiles of our end-users, we found that Emptoris Services Procurement had a high percentage of users who were remote and had only limited access to mobile devices so our initial focus was there. For the other product lines, our focus is initially on tablet capabilities for access to data, reports, and dashboards as they still have a wide number of users who access the application via traditional desktop-based access points.

PJ: Which of your main modules are fully integrated into your V9 suite, and which ones will be integrated later?

TC: With Emptoris Suite V9, the SLM product can now be integrated with the rest of the existing Emptoris Suite.

PJ: What about your social tools strategy? Is "social" a factor in your market (spend management) yet?

TC: Emptoris’ recent development focus has been on providing companies with solutions to manage and leverage internal and external data and intelligence from various systems and sources. Through the Program Management solution and Virtual Supplier Master, companies are able to collect and organize data and intelligence from trusted internal and external sources – and have access to an array of capabilities and workspaces to ensure collaboration and close working relationships with colleagues and suppliers.

Thus, the focus has been on leveraging internal intelligence and accessing and controlling external sources of intelligence – and enabling greater collaboration with key parties/suppliers. In our view, companies are focused first on gaining greater control and leveraging the benefits of technology in these areas. As we look further down our development track, we will certainly be looking at leveraging social media and accessing collective communication/data/insight that can be drawn out of such social media applications.

PJ: What are the differentiating traits of your Virtual Supplier Master and Gateway offerings, i.e., what particular pain points do they solve? What is your approach to master data management (MDM) and extract, load, transform (ETL)? Which are important in spend analysis, contract analysis, etc.?

TC: The Emptoris Virtual Supplier Master with Supplier Discovery is a global master repository for supplier information (and flexible supplier search and discovery capabilities) that allow the enterprise to integrate with preferred third-party content providers. This new solution, which complements any MDM system, provides the ability to easily aggregate, maintain and manage supplier data and intelligence, enabling informed decisions about the supplier base.

For its part, the “Gateway” is a culmination of solutions that enable suite collaboration. Included in the gateway is the Program Management solution, which is designed to manage the full lifecycle of procurement and savings initiatives across the global organization. Program Management offers greater control, governance, and guidance of programs with a single solution with cross-suite dashboards, task management and tracking, workflows and reporting. The solution is designed to help procurement professionals improve productivity and actively monitor savings goals and budgets, develop and assign key performance indicators (KPIs), and measure and report on results.

In short, the VSM is a single, central place for internal and external supplier intelligence. The VSM is meant to compliment MDM, and empower customers to achieve their own strategic vision – providing powerful, flexible and scalable enterprise intelligence – while still providing the IT, deployment, and supplier network independence that the global enterprise demands.

PJ: At Empower 2010, one of the major themes was your architecture that enables security, private cloud and on-premises choice, etc.? What’s the state of affairs there given that there was not much mention of this theme at Empower 2011?

TC: Emptoris continues to find that many Fortune 1000 and Global 2000 customers demand independence to manage their own strategic supply management and contract management solutions “behind the firewall” – and we are committed to support those customers. Emptoris Echos (The Emptoris Cloud Hosting Operating System), is a software delivery solution that enables companies to effortlessly deploy the Emptoris suite of applications behind-the-firewall with the ease, efficiency, and cost benefits typically associated with on-demand models. This offering is a major point of differentiation from providers who only support software as a service (SaaS) models. Emptoris supports multiple models, SaaS or behind-the-firewall, as the customer demands. See the figure below for Emptoris’ technology stack.

PJ: Has your market and competitive landscape changed of late and how? What trends have you been noticing in the market?

TC: I think we have all seen that the enterprise resource planning (ERP) providers have increased their investment and functionality in strategic supply management and contract management. However, customers and analysts clearly see that the best-o-of-breed or SSM suite providers still have a significant advantage in terms of functionality and deployments in this area. The best-of-breed or strategic supply management suite providers not only have proven deployments, they also have more demonstrated experience integrating with ERP systems themselves.

In general, we also see more companies looking for multiple solutions or suites, and as a result we see more suite providers in competition. Pure-play providers in specific categories, such as spend analysis or contract management, tend to only appear and compete in deals at smaller companies, below US$1 billion in revenue, where price is the predominant factor and the solution is not seen as part of a broader procurement program or strategic vision.

PJ: What is your ideal customer profile now in light of your new capabilities (i.e., how do you still manage to win new deals in this tough environment with a cutthroat competition)?

TC: Emptoris’ ideal customer is a Fortune 1000 or Global 2000 company, typically with over US$1 billion in revenue, and a strategic focus on procurement, spend management and/or contract management. For the TEM solution, companies with over US$10 million per year in telecom spend and/or over 1,000 wireless devices to manage would be the typical customer.

PJ: How are your major system integrator (SI), independent software vendor (ISV), resellers, and other partnerships going? Have they been affected by these acquisitions in any way?

TC: Emptoris partners such as Accenture, Deloitte, and IBM are a major part of the company’s strategy and success.  These partners help us to extend and accelerate the value of Emptoris solutions to our customers. Our partners are as excited as we are about the prospects and demand for Emptoris SLM and the full Emptoris Suite V9.

Dear readers, what are your views, comments, opinions, etc. about the current economic climate in your region/industry and about your approach to controlling spend via complex categories sourcing and contract management? What are your best sourcing and procurement practices as well as experiences with particular SLM/spend management applications?

If you are an Emptoris user, I would appreciate you sharing your experiences with the product and the company. How do you like the company’s outlined strategy and its future under IBM’s roof?
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