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This Spend Matters PRO analysis looks at the deeper implications of Thursday’s news that the e-procurement specialist BuyerQuest was acquired by The ODP Corporation.
When many people think about e-procurement, especially for indirect procurement that is nonstrategic, it doesn’t seem very exciting. However, procurement can actually be a secret weapon — not just for improving back-office efficiency and driving down purchase-cost savings, but also a way for procurement to increase its value to the business, including supporting revenue uplift.
One perfect example here is the curious case of The ODP Corporation, previously known as Office Depot Inc.
ODP for years has recognized, and felt, the threat of digital disruption in the form of Amazon and other online retail taking business away from its on-premise retail operations. It made the pivot to B2B years ago, and its B2B business has been overtaking its B2C business, and the firm has set itself up as a B2B holding company to offer more than just B2B office supplies, but also IT (via its Compucom unit), and other horizontal business services and vertical solutions.
And it wants to stave off Staples’ recent bid (third time’s the charm?) and try to slough off the physical retail space that’s an albatross around its neck, especially in the times of a pandemic. (See related links below if you want to see our old coverage of the last edition of the Staples/ODP saga).
But, how can e-procurement help?
ODP, of course, has to use e-procurement itself to improve cost savings and efficiency, and it also has to integrate its B2B sell-side systems to various customer e-procurement systems (over 100 of them, to be exact).
But, why would ODP buy a nifty little e-procurement vendor (with some broader procure-to-pay capabilities) like BuyerQuest when it could continue pursuing the status quo?
And how could ODP lure Prentis Wilson, the B2B veteran who put Amazon Business on the map and left it to run Boxed.com, basically a digital-only version of retail discount warehouses?
The reason is threefold: opportunity, strategy and digital.
And it’s more than just something like Koch buying Infor — it’s actually more interesting and disruptive if you dive down into it. We’ve always used scenarios to get clients thinking — like, “What if Amazon bought Coupa (or plug in your favorite S2P vendor here)”?
Well, it’s potentially more than a hypothetical here, given what just happened!
In this PRO analysis, we’ll get into why this is such an important strategic move and we’ll address these issues:
- Framing ODP’s strategy
- Where Amazon Business fits in all of this (comparison)
- What the transaction means for ODP and possible strategic thrusts
- What the transaction means for BuyerQuest customers & prospects
If you want to come up to speed on BuyerQuest and how it compares in the procurement technology market, we recommend starting here:
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