VERTICALNET INC

die inzwischen eine solche Pizzabude geworden sind, dass da auch einmal positive Überraschungen viel bringen - aber setzen würde ich darauf nicht. Verticalnet hat aufs falsche Pferd gesetzt - seine Einkaufskataloge, die in 2000 noch nicht niemand wollte, hat man nicht mehr - und die sind jetzt der große Renner im Rahmen des zunehmenden Outsourcing. Was die Firmen nicht mehr brauchen, Software für den Einkauf, weil sie immer mehr outsourcen hat man im Angebot - gegen große Konkurrenten, bei denen das Bestandteil des ER?-Programms ist. Outsourcing lands in procurement By William Atkinson 3/16/2006 Fighting the urge to keep everything in house, an increasing number of companies are sending their indirect-purchasing chores outside. And guess what: They think they're better off, as the case studiesbeginning on page 50 show. But, outsourcing procurement may not be the right strategy for everyone. When you mention procurement outsourcing to some procurement professionals, visions of segments of their departments being chopped off come to mind. Even worse, some execs envision their departments (and their jobs) disappearing completely from the organizational chart. But wait a minute! In fact, outsourcing part of your company's procurement activities may be a positive move. That's especially true for small companies that don't have critical mass in terms of volume purchases, says Roger Whittier, director of corporate purchasing at high-tech giant Intel in Santa Clara, Calif. As for those visions of purchasing jobs disappearing, Mark Mirelez, global procurement manager at National Instruments in Austin, Texas, says you'll still need purchasing personnel to manage the outsourced-service relationship, though a small cadre to be sure. Whether it's a good thing or a bad thing, there is no denying that the trend is growing—quickly. In the last five or six years, more and more companies, especially the large publicly traded companies, have begun to scrutinize a selected number of horizontal business processes as potential candidates for outsourcing—divesting themselves of noncore functions. Indeed, a study by the Aberdeen Group notes that there has been a threefold increase in the number of requests for proposals for procurement-outsourcing services in the last 12 months alone. According to Shruti Yadav, a research analyst in the business process outsourcing division of IDC, the functions that are most commonly being outsourced are human resources, customer care, finance/accounting, and, more recently, procurement. According to research from the Everest Group in Dallas, which publishes an annual study on procurementoutsourcing, the procurement outsourcing sector grew 30% in 2005 to reach $297 million. It is expected to exceed $380 million in 2006. Given that the current "spend base" is estimated to be about $25 billion (translating into a current market penetration of under 1%), there is a huge potential for growth in procurement outsourcing. According to Everest, "Procurement outsourcing has the potential to become thebiggest 'game changer' in business process outsourcing." The business sectors that are getting into outsourcing most heavily are manufacturing (especially high-tech and chemical), retail, telecom, and financial services. Why is the trend growing so rapidly? Peter Bendor-Samuel, CEO of The Everest Group, says companiestraditionally don't invest a lot of resources and expertise in indirect spend categories. Most of their resources and expertise go into direct spend, which is critical to the functioning of the organization. "However, it is important not to ignore indirect spend, because the total amount spent throughout the company on indirect can be very large, especially for non-manufacturing companies," he points out. "For example, a $6 billion insurance company found that its indirect spend was about $500 million." -------------------------------------------------------------------------------- Page 2 Other reasons relate to the reluctance of companies to add headcount in procurement, the difficulty in finding the right talent, and the challenge of retaining the talent if they do find it. "The main reason, though, is increasing cost pressures," says IDC's Yadav. That is, companies want to beable to hand over the procurement work to category experts, which not only have the personnel expertise available, but which also are willing to make the investment in the most efficient and up-to-date infrastructure and technology platforms. "In addition, providers have expertise in compliance management," she adds. Interestingly, the manpower savings associated with procurement outsourcing really only scratches the surface of benefits. The real savings come from the specialized procurement expertise and the volume-generated leverage that procurement outsourcing providers can bring to the table, which lead to lower procurement costs. In fact, according to Everest Research Institute, one reason for the growing popularity of procurement outsourcing is that the strategy can achieve five times the savings multiples of other business process outsourcing domains, delivering a potential bottom-line savings of up to 2% of sales. A recent Everest report explains that the savings do not depend on labor cost scale to pay off. Instead, savings are dependent on sector/functional expertise, with the savings coming from smarter sourcing decisions, effective relationship management, and legal compliance. "Companies get some savings by reducing internal costs associated with managing indirect spend activity," explains Everest's Bendor-Samuel. "However, they are receiving significant savings in the cost of the spend itself, because the outsourcing firms have the expertise and the leverage to negotiate much better deals. In some cases, providers will even guarantee certain levels of savings." Strategic opportunityWhile some procurement executives worry that the end result of procurement outsourcing will be to shut down procurement departments completely, virtually all (approximately 98%, according to most research) outsourcing engagements focus exclusively on indirect spend. "The vast majority of companies outsource only a portion of procurement, this being the indirect spend, which they realize is a noncore activity," states IDC's Yadav. "In a few instances, though, we are seeing companies outsource some categories of direct spend, but this is not common." Common targets for indirect spend outsourcing include temporary labor, travel/entertainment services, office supplies, marketing/print/advertising, IT, telecom, and facilities management. According to Jason Gilroy, vice president of outsourcing for ICG Commerce in King of Prussia, Pa., some companies, are also outsourcing transportation and logistics.Specific procurement-related activities that are being outsourced include: analysis of requirements, supplier selection, strategic sourcing, contracting, vendor management, day-to-day purchasing, and invoicing and accounts payable. Interestingly, while some companies outsource all or most of the processes associated with one or more indirect spend categories, it is possible to outsource one or more processes for all or most indirect spend categories. According to Shahriar Broumand, vice president and general manager of managed procurement services for Ariba in Sunnyvale, Calif., "Examples would be outsourcing the analysis of requirements, supplier selection, contracting, invoice processing, or supplier management, for most or all of your indirect spend categories, and maybe even for some of your direct spend categories," he states. Whose job is it anyway? -------------------------------------------------------------------------------- Page 3 In some arrangements, procurement departments outsource portions of the spend that have been managed internally. In other instances, though, the indirect spend is still being managed by the individual departments and is then directly outsourced to a third-party provider, completely bypassing the procurement department and, in essence, having no impact on them at all. For example, if a company'shuman resources department, rather than the purchasing department, handles procurement of temporary labor, then the decision to outsource that activity has no impact on the purchasing department. Who makes the decision to outsource the indirect spend? In large companies, according to IDC's Yadav, the decision to look into it in the first place and then to actually go ahead with the outsourcing is most oftenmade at the "C" level, such as the CFO, CIO, or CPO. In smaller companies, the decision is usually made by the president or CEO. Buyer's market According to the Everest Research Institute report, outsourcing procurement is currently a buyer's market, which allows companies to negotiate favorable terms. The reason is that providers currently have a significant amount of capacity available for sale. A caveat, though: "While the savings are attractive, it is important to realize that procurement outsourcing is generally much more complex than any other area of business process outsourcing," points out Everest's Bendor-Samuel. "It takes a lot of organizational design to put a program such as this into place."The first step, according to Kathleen Fuller, vice president of procurement services for IBM's IntegratedSupply Chain division in New York is that the CPO or other senior procurement executive needs to determine what is core and needs to be kept inside, as well as what is not core. "The next step is to decide if it makes more sense to build the expertise in-house to manage the noncore spend, or if it makes more sense to outsource it to a firm that may already be years ahead in managing that type of spend," she states. If you do elect to outsource indirect spend, it's not necessary to make a 100% commitment. In fact, according to ICG Commerce's Gilroy, most companies outsource only 50-70% of indirect spend. "The spend they keep internal involves those areas where they have either already built internal competenciesand expertise, or where they consider the indirect spend to be strategic to their organization," he says. One important key to success, according to IDC's Yadav, is to spend time determining who will be on the company's governing body that will work with the outsourcing firm. Members should include representatives from the functions that will be affected, such as HR, IT, travel services, facilities management, procurement, etc. This governing body should determine in advance how much responsibility the outsourcing firm will have for the procurement, what responsibility will be retained by the company, how the two will work together, and how the outsourcing firm's performance will be monitored. Once the decision is made to outsource, according to IBM's Fuller, the CPO should play a role in helping to drive compliance to make sure everyone in the organization is adhering to the new structure. "The purchasing executive should also make sure there is clarity of what role each party will play in the process, so that the teamwork necessary for success can be created," she adds. What happens to the employees who once handled the indirect spend after it has been outsourced? In most cases, they can be redeployed to other more strategic functions in procurement. "For example, one of our clients retrained the people in the purchasing department who had been responsible for the indirect spend to be in relationship roles with the functional owners of the spend to help support us as the third party," says ICG's Gilroy. "Other companies move their people to activities where they are responsible for -------------------------------------------------------------------------------- Page 4 low-cost country sourcing for direct materials and other strategic roles." Down the road Procurement outsourcing providers are working more aggressively to win clients (especially large clients) in the current market. And as clients begin to place greater demands on the providers, the latter are beginning to provide more services. "For example, they are becoming more involved in providing access to global integrated services and solutions," states IDC's Yadav. "They are also investing in more standardized technologies."While the vast majority of procurement outsourcing these days is limited to indirect spend, some wonderwhether the concept will expand to direct spend. For strategic reasons, it is unlikely that many companieswill want to turn over such a critical activity to a third party. However, some companies are already testing the waters a bit. "Some companies are having us handle some of their semidirect spend, such as packaging and chemicals," states Gilroy. "In the future, though, I think that some companies will even begin moving some direct spend to us." That, of course, is another story. In any case, those who fear the outsourcing of procurement should heed this advice from National Instruments' Mirelez, who says: "Constantly demonstrate your value-add and bea differentiator within your own company." As Intel's Whittier says, procurement professionals have a vested interest to be sure that their purchasing strategies and results are better than anyone else could generate.Who you gonna call? A shortlist of procurement outsourcing providers: Accenture Ariba IBM ICG Commerce Capgemini Prosero Who's it right for? -------------------------------------------------------------------------------- Page 5 "Procurement outsourcing is particularly useful for companies that are involved in rapid growth," says Hap Brakely, managing director of procurement solutions at Accenture. "These companies need to devote their limited resources to areas other than nonstrategic spend." Industries taking to procurement outsourcing include: Financial services Banking Insurance Utilities Heavy industrial (including automotive) Retail Healthcare Source: Accenture What functions are being outsourced? Analysis of requirements Supplier selection Strategic sourcingContracting Supplier management Daily procurement activity Invoicing/accounts payable Wie Du siehts läuft das Outsourcing gut, wenn auch in viel kleinerem Rahmen als einmal in der Spinnerei in 200 angedacht. Das Feld beherrschen ICGCommerce, knapp vor IBM. ICGCommerce gehört übrigens zu 75% Internet Capital, die vor einigen Wochen ihre letzten 7% an Verticalnet verkauft haben. Warum wohl, wo sie sich durch ICGCommere und Emptoris gut in der Branche auskennen.

man hier nachlesen. http://www.emptoris.com/home.asp Übrigens hielt auch hier Internet Captial wie bei Verticalne 7%. Während Internet Capital seine 7% an Verticalnet verkaufte, haben sie 7% an Emptoris nachwievor. Auf die Expertise eines der größten Wagnisfinanzierer der Welt müsste man sich eigentlich verlassen können - zumindest die Institutionals tun dies, denn halten inzwischen sensationelle über 60% der Aktien.

völlig ausgestiegen. Ich schließe nicht völlig aus, dass man mit Verticalnet Kursgewinne machen kann - aber das ist inzwischen eine Miniunternehmen, etwas größer als eine Pommesbude. Ich würde mich für Internet Capital entscheiden, denn die haben alle Fosile aus der Vergangenheit, wie eben z.B. Verticalnet, aus dem Portfolio geworfen und stehen heute als weitgehend schuldenfreie Beteiligungsgesellschaft mit ca. 20 Beteiligungen, von denen aber die zehn wertvollsten für über 90% des Wertes stehen glänzend da - mit vielen IPO's in der Pipeline. Mehr als Verdoppelung bis Verdreifachung ist aber bei Internet Capital auf Sicht von ein bis zwei Jahren nicht drin - wenn allerdings in Sachen IPO's sich die Dinge überschlagen, ist das auch noch nicht das Ende der Fahnenstange. Kurz um: Ich halte das Risiko-Chancen-Verhältnis bei Internet Capital für sehr viel besser. Und ich würde auch ihre Expertise als Wagnisfinanzierer nicht unterschätzen - umsonst haben die sich an ihren Restbeständen von Verticalnet nicht getrennt, auch wenn sie zuletzt nur noch 7% der Aktien von Verticalnet hielten.

Was ist mit Verticalnet los. Wie weit geht es denn noch nach unten. Austeigen? oder Einsteigen? Wer kann mir informationen senden!?