Aravo's Tim Albinson Responds to Spend Matters
Jason,
Thanks for the great write-up -- you do an excellent job of encapsulating the exciting developments here at Aravo.
I agree with your comment that the SIM market is still relatively early in its development. Many companies have yet to realize the full benefit of a SIM transformation and Aravo is engaged with hundreds of such firms as we speak. While Aravo created the SIM space/acronym in 2005, it has only been in the past 18-24 months that we've seen broad market acceptance for the category. A key validation point for the space was the announcement of our global SIM initiative at GE. Today, however, we are seeing broad acceptance of the SIM category among analysts, competitors, media, clients and prospects. In fact, we now regularly see RFPs with SIM in the title -- and this is something we're very proud of here at Aravo.
One minor clarification on your post -- Aravo has no intention of "moving on" in terms of our continued focus and leadership in the SIM space we pioneered. We continue to make significant investment in developing new SIM products and services, such as our new Aravo Risk product which was built on top of our core SIM application. Moreover, we have multiple SIM product announcements planned for 2010, and are busy at work building new SIM features and functionality to meet the needs of global enterprises. But perhaps most important, we believe that the next 12 months will realize a level of enthusiasm and interest in SIM technologies that will not be duplicated in other categories of SaaS or enterprise software.
Having said this, we do, however, plan to enhance and expand our current SIM application by delivering new and exciting collaborative capabilities powered by a combination of Aravo and Cisco technologies, such as WebEx. These capabilities will power new levels of collaboration within Aravo SIM and will greatly enrich buyer-supplier interactions. We call this new suite of functionality enterprise supplier collaboration or ESC. Stay tuned for more details in Q1 2010.
Best,
Tim Albinson
CEO, Aravo
Spend Matters would like to thank Tim for clarifying his company's positioning and direction.
Since 1999, AECsoft USA, Inc. has been providing Supplier Management solutions including Supplier Information Management, Supplier Diversity Tracking & Reporting, Performance Scorecard, On-Boarding, eSourcing, Online Catalogs and more. We now have a patent in this space - “User-Defined Scored Search and Automated Qualification” – which is used in our Global Sourcing (e.g. LCCS/China), Diversity Sourcing, Dynamic Compliance, Risk Management and others.
So far we have over 150 large customers currently and actively using our Supplier Information Management system (more if you include our eSourcing clients). Frankly, I have I yet to find any other SIM provider with more supplier portals in actual use.
We are all thankful to Tim and Aravo for making more people aware of the importance of this "niche" space - it is not small after all!
Thank you for the note. I think AECSoft is most certainly a success story in this sector. However, it is worth pointing out that there is no clear revenue or market-share leader at this point -- all the players I know of who target this market are less than $20 million in revenue (SIM revenue, specifically). It's a wide open playing field. Who will seize it remains to be seen, but regardless, it's the customers who stand to benefit from making an investment in an area that can have a serious impact on saving money, improving compliance and reducing overall supply risk.
Regarding your comment on number of customers, there are some others with many supplier portals in deployment (ranging from Oracle to Ariba to many others). Important to note: Portal does not = SIM. Moreover I would recommend that readers do not assume number of customers equates with overall sector leadership from an adoption and product capability perspective.
When you nearly give away a product as an extension of a supplier diversity solution, you can't exactly intimate with a straight face -- or maybe you can, I can't -- that you're a market-share leader. The questions to ask in evaluating claims like this are: how much are people paying for such a solution (and what return are they receiving), typically how wide are deployments both inside and outside the organization, what processes is it enabling, what systems does it typical integrate to and who is the usual project sponsor (and what are his grand ambitions and vision for the tool). Show me CPO or CIO sponsorship and the type of investment and political capital required to put on the line for real SIM deployments and I, too, could drink some of the kool-aid.
Thank you for taking time to add your thoughts – this is getting exciting!
My post to Tim Albinson was mostly related to his claim that Aravo “created the SIM space” – since, at AECsoft, we delivered SIM solutions before Aravo was founded, I am curious to learn more. To Tim: Would you care to elaborate? Also, while I have your attention: those 500,000+ suppliers for GE (very impressive number!) – are those actual suppliers that have registered and updated their information (after logging in) all by themselves, or is that just a pre-populated supplier count?
At AECsoft, we started delivering Supplier Management and Sourcing solutions before we developed Supplier Diversity solutions. We expanded the features and marketed this as our TSMS “Total Supplier Management Solution” in 2002. Many of our customers refer to this as Supplier Management, Gartner calls it Supply Base Management, yet others call it Supplier Portal, Supplier Data Management, Supplier Registration Portal, SRM, SCRM, SIM et al. Many names in use.
In our opinion, Supplier Management = Supplier Information Management + Supplier Data Enrichment + Supplier Diversity Reporting + Pre-Qualification + On-Boarding + Risk Management + Performance Management.
We have delivered Supplier Management solutions for 10 years now; with 150+ REAL current deployments. Every customer is different – some just need a simple registration portal; some manage all their compliance and reporting requirements; some care about global sourcing, others require French or Portuguese or Chinese interfaces; some prefer to install internally; some may have only 1,000 suppliers, or over 100,000 suppliers; some are sponsored by CPO, CIO, CCO (Chief Compliance Officer), CDO (Chief Diversity Officer), CSO (Chief Sustainability Officer), and some even by CEOs directly (typically our supplier portals contain CEO statements).
Yes, we have a large number of customers that use AECsoft's diversity solutions. However, more than half of our clients use AECsoft to manage all their suppliers (US or globally). Our average Supplier Management (definitely not just a portal) or SIM (if you will) installation is significantly more complex than merely capturing supplier information. We have seven-figure deals for Supplier Management-only installations in current operation that extensively pre-qualify, vet, approve, on-board and manage client suppliers – a slick solution that has cut on-boarding time by two thirds!
Another example: KBR uses AECsoft solutions to globally manage all their suppliers, bids and contracts - including one of the world’s largest ($28bbn) construction projects – details around this implementation will be covered by KBR at ISM's 2010 Conference in San Diego. We are honored to have been chosen and it will be very exciting – I hope to see you and other SpendMatters readers there!
The majority of our customers use AECsoft Supplier Management as their supplier-facing side, and rely on SAP, Ariba, Oracle or other solutions as their transactional procurement and financial payment system backend. We have customers telling us that AECsoft Supplier Management solution is at least 2 years ahead of SAP's SRM – they reached this conclusion after they hired SAP consultants to compare. Our recent patent certainly helps us maintain our distance. Maybe we need to start doing press releases to re-introduce system features that we developed 4, 5 or even 10 years ago!
Pardon the long post, but there were a few misunderstandings that needed sorting out.
Thanks!
Tom Ren