Trade Extensions is a curious sourcing vendor, with company leadership split between the UK and Sweden (I’ve met the leaders of the organization in both places). Regardless of whether you consider the company as UK or Nordic — or North American, for that matter, given its recent expansion — it’s been beating to its own sourcing drum (or would that be trumpet, given one of the founder’s hobbies?) in writing a set of growth rules that differentiates it from others in the sector. Despite the maturity of the general e-sourcing market, with the exception of CombineNet, the company lacks true specialist competition, although best of breed sourcing suite vendors including BravoSolution, Emptoris and Iasta also offer solutions worth stacking up side-by-side. Peter Smith and I recently caught up with Trade Extensions’ Garry Mansell and Arne Andersson to learn more about their recent business and solution development activity. Here’s, in part, what we learned. (And see Peter’s coverage on the UK site here!)
Trade Extensions is growing fast in the US. In fact, 48% of their revenue is now coming from this side of the Atlantic. They’re also fighting it out to win new customers, with total live customers now amounting to 33 (and 17% of new transactions coming from net new customers, rather than as contract extensions). The majority of their sales now come from licenses (54%) rather than projects (46%) and software comprises a healthy 77% of their overall revenue, compared with 23% for services. Spend Matters suspects that in the future, an increasing number of deals with come from software licenses rather than individual projects, although organizations and consulting partners should not be deterred from engaging with Trade Extensions on a one-off basis for leveraging their software and expertise to source complex categories.
From a solution standpoint, Trade Extensions can lay claim to having truly expanded outside of sourcing optimization, although it obviously remains at their core. They also offer capability extending from upfront spend analysis to foundational contract management. Additionally, they’ve integrated the entire suite with Tibco Spotfire to deliver front-end analytics reporting, leveraging the fast, in-memory capability of Tibco to crunch through and report on large datasets (Tibco is separate from the solver agnostic core component of Trade Extension’s sourcing suite, which can plug in a range of mathematical solvers).
Despite the suite extension, Trade Extensions has recently been focusing a lot on enabling companies to use their core sourcing components for a broader range of sourcing events, rather than just highly complicated bids. As a result, they’ve put quite a bit of emphasis on enhancing the core reverse auction and project management software capabilities of the sourcing tool. In some ways, this marks a return to the roots of Trade Extensions as the company used to run reverse auctions alongside optimization events for its customers in a solution capacity in its earlier years. The purpose behind this effort is to enable organizations to use Trade Extensions for a broader portion of their spend and ameliorate the need to license two specific and event-driven sourcing tools.
We briefly looked at some of the new auction features and general capability this summer, and our view is that the solution is leaps and bounds above general-purpose e-auction tools in terms of the general collection and presentation of bidding information. The amount of information users can opt to intuitively display in a single screen from both a graphical and data sheet perspective is almost dizzying. Dynamic charting provides the ability to graphically depict a range of criteria in a single view that one would often need to click around multiple times for (if even available in competitive solutions) including trending charts by supplier overtime in previous and current events, real-time low-bid status by lot, top overall rankings and bidder activity.
When it comes to examining the actual bidding inputs of a supplier, Trade Extensions begins to introduce a range of additional graphical and numerical insight into the single-screen mix that begins to mirror that of the feedback you would expect during an optimization-driven analysis. Stay tuned as we investigate further in Part 2 of this post.