| | By Mick James
Is procurement going
to be the buzzword for
2005? This formerly
unglamorous and neglected
function seems to be at
the front of everyone’s
mind this year. It’s not
hard to see why: clients
are at the very least
agnostic about growth
prospects, and many feel
they have little more to
achieve in process
improvements and internal
cost efficiencies.
Suddenly procurement and
strategic sourcing are
emerging as relatively
low-risk routes to gain
much-needed headroom in
an uncertain world.
While many of the
major consultancies have
branched into sourcing,
this has also been
fertile ground for
stand-alone specialist
firms. One company making
aggressive moves into
procurement consultancy
is Ariba. Ariba started
out as a software house
providing e-procurement
software and
implementation, but now,
after some strategic
acquisitions and organic
growth over the last few
years, it provides
end-to-end purchasing
solutions combining
software, consulting and
outsourcing on a global
basis.
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“It’s a powerful
combination and a
competitive
differentiator for us to
have such a focus on
spend management on a
global basis” says Lance
Younger Strategic
Consulting Director at
Ariba.
Younger believes that
Ariba’s specialist focus
on purchasing gives it a
strong advantage over the
more generalist approach
of the bigger
consultancies. It
combines neatly with a
renewed interest in
purchasing on the client
side. With over 1,700
people focused on nothing
else but spend
management; 25 offices in
21 countries and counting
over 25% of the top 500
global organisations as
clients working with
them, Ariba appear to be
well-positioned to
capitalise on this.
“CEOs and CFOs are
taking a look at the ways
they can make the
business more
profitable,” he says.
“Put simply, they can
increase market share or
reduce the cost base, but
it takes a lot less to
reduce the cost base to
have as great an effect
on profitability as
increasing sales. People
see that they can get | |
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| | has a wealth of expertise
and knowledge to draw on,
with 50 per cent of the
global 100 companies
using its services.
“Where a traditional
firm might put five or
ten consultants on an
engagement to do a piece
of strategic sourcing
work, we only need a
fraction of that resource
to achieve the same
results,” says Younger.
According to Younger this
means that not only can
Ariba accelerate the
sourcing process, but it
can also offers greater,
more effective
“firepower” than a larger
more traditional
consultancy. It also
enables Ariba to offer
its services in a very
flexible way, from
one-off interventions to
building an
organization’s complete
in-house capability.
Younger believes that
the focus on spend
management is set to
continue and that Ariba
can take a larger share
of the overall
procurement consulting
market. Ariba face a
similar challenge to
others operating in this
growth area – creating
innovative solutions
requires innovative
people, and there appears
to be a shortage. To | |
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| | support their ambitions
Ariba’s consulting team
is recruiting across
Europe, primarily for
individuals with both
purchasing and consulting
experience with the major
firms.
”We are looking for
dynamic and different
individuals,” says
Younger. “For people who
want to have a career in
purchasing, the beauty of
Ariba is that we do
everything in that space
- you could go from being
a member of the
consultancy team to being
the head of an
outsourcing team. You
could choose to be based
anywhere across the
globe, from Sydney to San
Francisco or London to
Prague.”
It appears that vast
opportunities exist for
individuals and
organisations that can
engage fully in the
procurement space.
Equally so, organisations
need to be responsive to
the increasing needs of
their clients for
comprehensive spend
management solutions, in
much the same way as
Ariba has set itself out
to be.
Contact Mick with your
views or suggestions at:
mick.james@top-consultant | |
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| | more return for every
pound invested in
improving procurement
versus sales.”
The interest from a
consulting point of view
comes when you realize
that this is not simply
an exercise in cost
reduction but an
opportunity to increase
the value that can be
generated through the
supply chain, from
customer to supplier, and
procurement has become a
focal point to make this
happen. “It’s a
fundamental touch point,”
says Younger. “The future
for Ariba is adding real
value as our clients are
becoming more and more
sophisticated.”
Ariba also has an
innovative delivery model
which they are
continually improving to
meet client needs. “We’re
moving to more of an
on-demand model, not just
for software but
consultancy as well,” he
says. Ariba’s experience
of working with clients
in activities such as
running auctions and
providing managed
services means that it | |
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