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With IBX Purchasing Isn’t Just A Business, It Is A Way Of Life!

Written by: Jon Hansen

Article Overview: “Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal – a commitment to excellence – that will enable you to attain the success you seek.” Mario Andretti, one of the most successful drivers in the history of auto racing

With IBX Purchasing Isn’t Just A Business, It Is A Way Of Life!

It is indeed rare that I encounter an individual, let alone an entire organization whose passion for procurement rivals that of my own. As the professionals who attend my conferences will tell you, I eat, drink, breath and sleep this amazing field of practice. So when I was first introduced to the Swedish-based IBX Group on the UK leg of my Fall Speaking Tour, I must admit that I had to do a double take.

Built on the foundation of assured self-awareness that unequivocally states that “Through the years, IBX has been strictly purchasing. That’s who we are, and that’s who we’ll always be,” this organization sees their customers as the gravitational force that drives their core belief engine that proclaims “Operational excellence must be a fundamental part of everything we do.”

This undoubtedly explains why IBX has established a strong financial track record year-over-year since its inception in 2001 achieving an Annual Growth Rate of 37%. An accomplishment that is made even more amazing by the fact that during the same period industry giants such as Ariba consistently struggled with mammoth losses (between 2001 and 2005, Ariba lost $3 billion dollars on $1 billion in sales), a continuing high rate of initiative failures – 85% of all e-procurement initiatives worldwide fail to achieve the expected results, and acquisition strategies that fuel rather than resolve the paradoxical conflict between a traditional licensing model and those of the emerging SaaS offerings. A conflict that is reminiscent of the internal angst experienced by Kodak when they steadfastly held onto their traditional film business instead of actively building on their leadership position in the emerging digital imaging market. We all of course know what happened to Kodak. IBX is unencumbered by such a duality of purpose and vision.

And based on this singular focus, IBX’s unique combination of “purchasing expertise, scalable on-demand software and managed services,” creates sustainable customer value through the “transformation” of their client’s purchasing practice into a “highly efficient” process.
In the end, this desire on the part of IBX to serve the client’s best interests creates a collaborative environment that for the most part is absent from the majority of e-procurement/supply chain initiatives. This is of course what separates IBX from the majority of vendors in what has become a highly volatile marketplace.

A Pedigree of Distinction, A Foundation of Flexibility

Established in 2000, IBX’s formation was initiated by Ericsson (one the world’s leading telecommunications company who itself was founded in 1876), and the Skandinaviska Enskilda Banken AB (SEB) financial institution which came into being when the Stockholms Enskilda Bank (established in 1856) and Skandinaviska Banken (established in 1864) merged in 1972, as well as what the company refers to as b-business partners. In 2001, the Denmark-based pharmaceutical giant Novo Nordisk also became an owner as well as joining Ericsson and SEB as an IBX customer.

Needless to say, IBX’s elemental roots are steeped in historic experience and perspective that has led to its dynamic customer-centric vision of delivering value. The fact that the company’s solutions and expertise are the direct result of its ability to service the practical needs of the very organizations that oversaw its formation only adds to its creditability as a viable player in the evolving world of supply chain practice.

And while one may be inclined to recall the early days of industry specific application development (anyone remember the MAI Basic Four?), where software was first developed to address an internal need of a specfic company within a particular industry sector such as hospitality or healthcare, and then in an attempt to recoup said development costs was then marketed as a turnkey solution to other businesses within the same sector, IBX’s “scalable, on-demand solutions” are not confined to the telecommunications, financial or pharmaceutical industries. This means that customers regardless of industry can benefit from IBX’s experience without being limited by them.

Perception Beyond Products

When you have been in this field of practice long enough, you can sometimes feel that the Madison Avenue proclamations of “best of breed” technological capability, superior service and unsurpassed knowledge or expertise are the plug and play terminology of vendors whose sole goal is to convince you that they are the best.

Referring once again to the persistent high rate of e-procurement/supply chain initiative failures in both the private as well as public sectors one would be hard pressed to give the “we are the champions” rhetoric any credence. In fact given the dismal performance track record of most software companies relative to satifying client expectations, it would almost seem necessary to create an entirely new set of catch phrases.

What this has done, is force prospective clients to veiw the vendor/solution selection process through an increasingly cynical lens, and truly scrutinize the core competencies of the “partners” they will ultimately come to rely upon to achieve the desired process efficiencies within their supply chain practice.

A key element in determining vendor performance both now and in the future must therefore extend beyond the technology being offered to include business acumen or perception. In fact, this is the critical driver that will lay the foundation for either a successful or failed initiative.
In essence, and in line with the findings that were referenced in Jim Collins’ critically acclaimed book “Good To Great,” technology by and large is irrelevant in the absence of true process understanding and refinement.

As Hewlett-Packard’s catastrophic (and failed) attempt to install a tier one vendor’s supply chain solution clearly demonstrated, technological aptitude does not necessarily translate into process efficiency.

Why IBX?

For those of you that are part of my regular readership, you already know that an important tenet of the Procurement Insights Sponsorship Program (which includes these profiles) is my total commitment to neutrality. And as such I will continue to leave the assessment surrounding the viability of the IBX value proposition in your hands, (as always, I will direct you to the Link To Our Sponsors and Sponsor Presentations Sections of the PI Blog to investigate the IBX organization and its offerings in greater detail, and at your own convenience).

As indicated at the beginning of this post, the passionate and singular focus on being the best at delivering purchasing solutions transcends the IBX offerings from a technological platform to one of perceptive understanding. This “deep purchasing competence” enables the company to view their customers challenges as if they were the customer. Considering the IBX ownership, this is a profound truth in both reality as well as a principle.

So rather than distract you by providing a catalog or program of their solutions and services, after all every vendor web site lists products and services, I want you concentrate on the intangible aspects of the IBX organization. Through this lens of impassioned insight and vision, you will find the often overlooked but nonetheless essential building blocks of a successful e-procurement program.

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Article Tags: acquisition strategies, core belief, customer value, demand software, digital imaging market, e procurement, emerging digital, entire organization, film business, gravitational force, ibx group, industry giants, leadership position, operational excellence, procurement initiatives, saas, self awareness, singular focus, traditional film, uk leg



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