Ed Cross: When I was at Pricewaterhouse, I was heavily involved in the area of procurement project consultancy. Exchanges were much heralded and I was very supportive of them but the more I got into them, I observed that they didn’t take off. A lot of them lost ground, went bankrupt, or disappeared. There’s an easier route to buying stuff but I’m not convinced that for many organizations, they’re able to provide the most competitive prices, the appropriate quality, and service standards for the customer against what they could do for themselves.
I’m not suggesting that they won’t happen and they won’t continue and grow in certain areas, but I think there are some limitations to them. The second point is, some of them, I supposed if they grow very large, would be bought on the anti-competitive. There’s competitive law and legislation in many countries that prohibit the buyer, or a small group of buyers or a small group of suppliers from becoming too strong. There are probably some limitations from that perspective. But from the exchanges point of view I rarely ever see them in the European theater. I think they’re more mature in the U.S. but in the rest of the world, I’m not sure there are many examples of successful or even existing exchanges. The U.S. is a lot more technology-enabled and more focused on these things.
Sramana Mitra: Technology adoption of the world starts in the U.S., there’s no question about that. In our incubator program, we work with companies all over the world. For example, software companies and technology companies trying to sell to customers and to price customers in Europe, India, and Asia. This is a much longer sell cycle.
Ed Cross: I agree. Going back to my earlier point, the big thing for me is the one-stop solution for procurement because it doesn’t exist. Ariba certainly isn’t it, neither is SAP. There isn’t one solution that fits all the needs of the procurement professional and I think that’s a weakness in the technology marketplace for procurement solutions.
Sramana Mitra: We have seen a lot of point solutions and you’re saying that the integrated be-all, end-all solution doesn’t exist.
Ed Cross: Yes, you need to bring all those single-point solutions together in one place. I think that could be a very valuable asset for many organizations.
Sramana Mitra: OK, thank you for your time.