Event season commenced last week taking me to San Francisco for Scout RFP’s second annual Spark by Scout user conference. Held at the SF Jazz auditorium and described by CEO Alex Yacubovich as an “Adult field trip,” the event had people from 400 different companies along for the ride.
ScoutRFP is a more recent entrant to the world of eSourcing and has been able to inject a level of interest and excitement into a segment of the market that had been seriously lacking. From the outset of the conference, a few things were pretty clear: the company led by a group of likable young executives has real momentum and its customers seemingly like this solution provider in a more genuine way than almost any other provider that I’ve seen in the space.
Some notes on a few different presentations:
Scout’s State of the Union is “2x”
President Stan Garber kicked off the day with an overview of the company and how it had performed over the last year. The company, which was founded four years ago now has 117 employees. It also has 180 customers and experienced 2x growth this past year from a sourcing throughput standpoint. Over the last year, Scout’s customers ran 42,000 sourcing events including 3,700 eAuctions. The customers, in aggregate, recognized $3.5 billion in savings and Scout says that its platform now has more than 165,000 users, including suppliers. The 200% growth in these areas was a large part of why the company was able to raise $33 million in its latest round of funding.
Alex Y then continued the discussion highlighting three market shifts that Scout believes are going to help it realize its vision to “be the single source of truth for sourcing.” First is the large trend of consumerization which translates in the enterprise software world to mean delivering highly usable and intuitive solutions with robust capabilities. Second is helping to drive procurement and sourcing teams from a compliance focus to an impact focus. Ardent has framed this shift in multiple ways over the past few years – moving from a command and control focus to one of agility and intelligence, or a shift in engagement with the business from one of ‘controller’ (“are you following policies? Let me audit you…) to ‘treasurer’ (“tell me about your business and how we can invest in it to improve outcomes”). And third is the debate of Monolithic solutions (the term is a novel dig at the suite providers) vs. best of breed. While Scout continues to expand its footprint, it sees itself very clearly as a Best-of-Breed provider… and they are not wrong in that context. You can guess which type of solution they feel is better.
Customer Case Studies (at the Speed of Business)
A series of Chief Procurement Officers followed the Scout executives to briefly share their experiences with Scout. And by briefly, I mean very compact 5-minute case studies.
The extremely well-educated Sarah Toomey, Anaplan’s Head of Global Procurement, shared her team’s four year transformation from Infrastructure to Transformation to Maturation (in 2019), and finally Evolution in 2020
Betsy Bland, VP of Corporate Strategy at Workday, gave an overview of the company and its solutions (Workday is a strategic investor in Scout). She was followed by John Bruno, VP of Global Real Estate, Workplace, and Procurement, who discussed how he and his team have been using Scout to drive value.
Next Kenny Chasten, representing Wellmark, fired through a series of metrics including the number of procurement staff (23 FT), their operating budget ($2.9 million), their total indirect spend ($180 million) and direct spend ($5 billion), and the amount they have saved in each area using Scout ($11 million in indirect; $120 million direct). Kenny and the team at Wellmark want to have “all things vendor” in Scout, and to that end, Kenny stated that they have all of their vendors loaded, segmented, and tiered in the Scout system.
The morning sessions were rounded out by two great CEO presentations – Jeff Immelt, former CEO of GE, and Kate Renwick-Espinosa, the CEO of VSP Vision Care, which I hope to cover in a future article or two. While both CEOs’ topics were not focused on procurement, each spoke very directly and personally about the overall and specific impact that the procurement function has had on their companies’ performance.
Final Thoughts
Although Scout is only four years old, it has captured the attention of many in the market and it really seems to have captured the hearts and minds of its customers. As the executive team noted, Scout had a big 2018 with major growth (2x!). And, the team has ambitious plans for 2019 to grow sales and solution usage (sourcing volumes, users, suppliers, and savings). It also plans to expand and improve its offering and used the conference to announce the release of Scout Dynamic Negotiation Analytics (Scout DNA), a solution that enables more advanced bid analysis and award decision-making. It is always great to see newer companies start to make their mark and inject some energy into an existing market. I hope and expect that more tech entrepreneurs will follow Scout’s lead and veer into the supply management arena.
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