Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 7)

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.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 6)

Sramana Mitra: There are some very special exchange offerings in the automotive industry and several other spaces. There are very successful vertical exchanges operating right now doing billions of dollars in transactions.

Ed Cross: Probably from the European end, but I see very little activity. It may well be the case that they’re successful in the US, but I don’t necessarily see them amongst my customer base and in my network of procurement professionals. I don’t necessarily see much evidence of them operating anywhere else in the world other than in certain industry sectors.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 5)

Sramana Mitra: I have followed those phases. There is Starbucks doing contract life-cycle management. Then, we have had pretty sizable companies being built in the procurement management systems base like E-vines that now sits inside SAP and several other vertical-focused offerings on procurement exchanges. How do you see that trend evolving?

Ed Cross: I wouldn’t want to specifically comment negatively about a competitor in the marketplace. However, you have to look at the technology that Ariba and SAP supply and think in terms of whether it covers all the procurement set of activities. Frankly, it doesn’t. Ariba carved out a very fine niche for themselves in certain areas of the procurement life-cycle, but they are not doing all of it and neither are SAP. That’s why there’s a proliferation of organizations in the marketplace offering single-solutions for single areas of procurement activity.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 4)

Sramana Mitra: It’s stuff like office supplies that you are outsourcing. It’s more of a cost consideration. Whereas, a more strategic procurement issue would be dealing with parts and technology, and that’s where it becomes more complicated.

Ed Cross: Let me be more direct. To outsource indirect stationery, for example, can be a fairly simple decision, but not to outsource direct materials. If you are an automotive manufacturer, to outsource the procurement activities associated with buying automotive parts that go into vehicles is a bigger decision.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 3)

Sramana Mitra: What do you think is driving that trend? Why is procurement outsourcing growing?

Ed Cross: A couple of things. One is that businesses need to save money. Though the global economy is starting to come out of recession, there was a level of retrenching that went on when economic conditions were difficult for businesses. Procurement is a relatively straightforward area to save money. For the CFO or the CEO, procurement outsourcing is starting to enter the mainstream and being seen as a viable approach to saving money, particularly if it’s outcome-based. We tend to charge our customers from the savings that we achieve. It’s a fairly straightforward decision for the CFO to engage somebody like ourselves.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 2)

Sramana Mitra: You said you have about 4,000 people in India. What’s the global distribution of the workforce?

Ed Cross: We have about 8,500 people around the world, of which about 4,000-4,500 are in India. About 2,000 are in the U.K., about 1,000 in Europe, several hundreds in North America, about 500 in Australia, and the rest are spread across 10-15 other territories which include Japan, Singapore, and Malaysia. We have smaller populations in each of those countries typically dedicated to the local customers that we have in those territories.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 1)

Having been awarded the Entrepreneur of the Year by The Economic Times back in 2010, Xchanging continues to provide leading solutions to a wide range of industries across the globe. Ed Cross, Xchanging’s Executive Director, takes us on a quick tour of the business outsourcing landscape discussing the trends, challenges, and opportunities facing the industry.

Sramana Mitra: So Ed, give us some background about yourself as well as Xchanging. What is your business? What do you do? What customer problems do you solve?

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Thought Leaders in Outsourcing: Interview with John Meyer, CEO of Arise Virtual Solutions (Part 7)

John Meyer: You are right. We have a few companies that already exceed the one million threshold. One example is a single mother who eight years ago was worried about her children coming out of elementary school and being on a street corner. She decided to go all in with Arise. She was working crazy hours – 100 hours a week. She was basically working and sleeping. She had friends who said, “What happened to you?” And she said that she had gotten this check and that she was doing really well. So they asked her if they could do it, to which she replied: “Sure, just set up a legal entity, get a computer, get a phone line, get through these people´s certification process, and you are in business.” >>>