The procurement function is going through a time of expanding expectations and responsibilities in most organizations. Depending on the structure of each company and industry, the move may be into supply chain, inventory management, finance, or raw materials management. In order to meet the challenges this presents, we need solutions that offer expanded capabilities.
Over the last twelve months, there have been several high profile acquisitions in the supply management space. These acquisitions were aimed at integrating the source-to-settle process into other corporate systems and processes. As these large players became subsets of less specialized solution providers, the opportunity was created for new solution providers to fill the need for dedicated solutions offering the right combination of breadth and depth.
One company seizing the opportunity to increase their solution footprint and fill the void is SciQuest (NASDAQ: SCI), a provider of on-demand strategic procurement and supplier management solutions. For several years they have been adding to their portfolio through the acquisition of specialized players within spend management. In December 2010 they acquired AECsoft USA, a provider of provider of Supplier Information Management (SIM), supplier diversity and sourcing solutions. Then in July of 2012 they acquired Upside Software, a Contract Lifecycle Management (CLM) solution.
Their latest acquisition is Spend Radar, a spend analysis solution provider. Although this brings them closer to having a complete end-to-end solution, the key to their success will be in their ability to integrate their acquisitions without sacrificing the flexibility or performance of any one solution. When asked about this part of their strategic plan, Eric Zoetmulder, SciQuest’s Director of Product Marketing, told Buyers Meeting Point, "It is true that we have grown our offering through acquisitions; we have been very selective, believing that any large or mid-size commercial business should now consider SciQuest as a prospective solution partner, whether they are looking for a point solution or one that spans the entire source-to-settle process."
SciQuest’s ability to harness the forward-looking creativity of the Spend Radar team will determine their ability to maintain the reputation Spend Radar has worked to build when compared with other spend analysis solutions. In July of 2011 Buyers Meeting Point interviewed Brian Daniels, former CEO of Spend Radar, now VP of Spend Analytics at SciQuest, and we were struck by his desire to expand the capabilities of spend analysis beyond reporting and analytics to performance management – providing visibility into savings realization. "We recognize that savings realization and compliance are key to the value proposition of a spend analysis solution,” said Daniels. “It is impossible to provide spend teams with actionable data on suppliers and pricing if you can't also provide them with fast, frequent, automated, and high-quality refreshes."
There is no indication that plans to enhance this part of their solution roadmap have been altered by the acquisition. If anything, SciQuest recognizes the competitive advantage this will represent once available, and wants to be sure the new relationship between the two organizations does not jeopardize it. To this end, the leadership team at Spend Radar has been left in place, and the brand will not be altered.
We look forward to seeing the future potential of this collaboration come to fruition, and how yet another provider consolidation impacts the other solution providers in this space.