In the course of our work for and discussions with large procurement departments this year, GEP’s name is coming up much more frequently than just a few years ago. Impressively, the solutions and services being provided by GEP in these discussions are quite broad, be it managed services, outsourcing, or solutions like spend analysis. They’ve also won one of the deals we were involved in and are currently on the short-list for several P2P & Sourcing softwaredeals that we’re tracking. We recently spoke to GEP’s Mita Gupta, vice president of global business development and Al Girardi, vice president of global marketing and got the chance to get a mid-year update and discuss the products and services that GEP uses to serve its global client base. What follows today is the first of our three-part analysis.
GEP: Differentiating Itself with a Broad (& Strong) Portfolio
Experience matters when it comes to business process outsourcing. This is especially true in procurement and strategic sourcing, two areas where attention to detail matters significantly, particularly when you consider the complexity that can be found in spend of a large multinational company like Kellogg’s. Experience matters when you’re considering which company can handle your outsourced procurement processes, drive your category strategy, or tackle your tail spend. Experience also matters when it comes to software development and deployment.
Experience is one of the reasons GEP, a longstanding provider of procurement and sourcing services (which we wrote about in November 2013), is able to successfully manage $50 billion in spend annually for its clients. Experience also helps explain why the company has been doing so well the past few years. Since their founding as Global eProcure 14 years ago, the Clark, N.J.,-based company has focused exclusively on the procurement and strategic sourcing marketplace. They initially did this as a consulting/outsourcing services company, but through the years, they also, very quietly, developed a comprehensive suite of solutions, culminating last year with the roll-out of their “SMART by GEP” (click to read our analysis) solution suite offered as both a cloud-based and mobile-enabled software platform. The SMART launch has been a great move for the company, serving to bring significant interest and attention to an already strong, but less-known, suite of solutions.
A Full-Service Shop with a Nice Tech Flavor
Many companies in the procurement space are either services- or software-focused. The reason for this is frequently company valuation-driven. The software companies that are concerned about their valuations see services revenue, which typically has a lower margin than software revenue as something that will compress rather than expand the multiples that are used to value their companies. The valuation analysis is correct, but that analysis often fails to consider customer needs. GEP has taken a different tack, offering “strategic services” such as process optimization alongside “procurement services” such as category management, sourcing, and procurement BPO as well as a technology suite that GEP refers to as an “end-to-end procurement solution.”
According to Girardi, GEP’s focus is one that puts the customer first. Since their work is for procurement and sourcing teams, Girardi notes that these teams can require a range of tools and support in order to get their jobs done properly. Because of this, GEP consultants are well versed in using technology and are able to use a wide range of solutions, and not just their own, in order to get the job done.
According to Gupta, GEP’s services team grew 15% in full-time staff resources, while the entire company experienced staffing increases of between 20% and 25%. Revenue growth was also strong and this growth has been seen across all offering areas resulting in a number of new clients, including those using technology alone. GEP says that their year-over-year technology business is growing faster than other areas, which serves to validate the cloud-, mobile-, and touch-enabled SMART by GEP solution suite.
That said, Girardi notes that the company is a full-service shop. GEP works very closely with its clients to develop new products and services that can help improve results; one example of this is their relationship with Kellogg’s, which has led to several new developments in their product roadmap.
Like other companies in the space, GEP’s primary focus is on growing their market share of the procurement services market, according to Gupta. They’re doing quite a good job at this – GEP experienced 30% year-over-year revenue growth in 2013 and, according to Gupta, is on track to beat that number this year. GEP is not a new player in the marketplace, but they’re certainly growing like one; and the growth is being seen across all areas of the broad and strong solution portfolio. The future looks rather bright for GEP, especially when we consider how much the clients we speak to seem to love working with them.
This is the first in a three-part article on GEP and their solutions/services. Next time, we’ll talk about the company’s organizing principles and a few of their recent wins.
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