In an earlier column on ICG Commerce, I took a particularly close look at the company’s history and traction to date; in this second post of the series, I will more closely analyze ICG’s core value proposition and how it supports this philosophy organizationally and technologically. ICG Commerce has set up its entire go-to-market message around what it terms “savings realization,” an approach to procurement BPO that seeks to not only help companies identify savings, but to capture all possible opportunities for making numbers stick and improving organizational returns on the back end. Interestingly, what’s become central to this operating philosophy is what ICG describes as a “market intelligence” core. For ICG Commerce, market intelligence is all about helping companies better identify not only the best savings opportunities and how they stack up against the market, but also how to adjust to constantly changing market conditions in order to take advantage of opportune moments for additional savings identification and capture.
ICG generates savings on behalf of its clients in three different areas. The first, sourcing and category management, almost goes without saying, and remains a differentiator in relation to the Indian providers who compete for the same book of business (although IBM and Accenture will claim similar category depth and global knowledge). ICG Commerce does not just limit its sourcing and category management approach to upfront negotiation, however. It also focuses on, in its words, “driving continuous cost improvements beyond what we initially negotiate in the initial sourcing process.” These areas include demand management for areas like MRO and travel policy. The second major bucket falls under the core of the source-to-pay process: procurement itself. Here, ICG Commerce helps drive savings through such areas as preferred supplier redirection and behavioral analytics (not to mention transactional savings through greater automation and compliance). ICG’s third major focus is the accounts payable function, which all experienced finance folks know can provide a major point of leverage around both savings and working-capital management strategies/execution, provided that organizations have enough visibility into actual invoices and liabilities.
Specifically, ICG Commerce views the lifecycle of procurement BPO from a solution perspective centered around four key areas: sourcing (which includes building stakeholder credibility in addition to everything else we’ve come to expect of this step), implementation (including process integration, technical integration, and internal education), P2P, and ongoing category management that leverages “data and intelligence” to, in ICG’s words, “improve compliance, supplier performance and savings.” In terms of how it delivers on this model, ICG has a staff of over 250 category and sourcing professionals spread across three regions: The Americas, EMEA (Europe, the Middle East and Africa), and Asia. Each region has particular category knowledge and expertise based on what ICG’s clients are procuring in that regional market. ICG brings particular bench strength in such areas as MRO/facilities (63 category specialist), logistics (28 team members), IT/Telecom (32 FTEs) and marketing/corporate services, owing in large part to its concentration of consumer-products customers…
