Open Letter from IASTA on SAP/Ariba & Procurement Industry Changes

 Dear Procurement Colleagues,

As many of you are aware, the Procurement applications industry experienced a tectonic shift last week on May 22, 2012 when SAP agreed to acquire Ariba. On behalf of IASTA, I congratulate Ariba and its shareholders on their well-earned, well-deserved success. Now I want to take a moment to address what I believe the acquisition means for you and the broader marketplace.

While not entirely unexpected, the acquisition has ushered in extreme uncertainty within the sourcing practitioner realm. The largest, best-of-breed Procurement vendor will be swept away, subject to shareholder and regulatory approval, leaving many to wonder: “How does this impact my daily objectives? Where is innovation going? Most importantly, how will my business be transitioned if I am part of either solution?”

To some, the SAP/Ariba marriage will be a highly beneficial, symbiotic partnership- particularly in enterprises that have both platforms already in place. In those instances, life just got a little bit easier.

To others, this acquisition will mean turbulence and friction. This latter group understands that change management is a difficult undertaking when an organization adopts enterprise software under any circumstance. The coming cross-platform integration activities, coupled with the inevitable process and workflow disruptions, will only create additional headaches. The material impact a troubled change management program will have on strategic business planning cannot be easily measured or quantified.

The acquisition impacts IASTA less than some may speculate because of the innovation path we have built and followed over the past decade. We’ve never considered ourselves an “apples to apples” competitor with Ariba. At IASTA, we focus on one thing and one thing only: Empowering Sourcing Excellence. By doing so, we create purchasing heroes inside our client organizations. These are our first and second core company values, respectively.

We have found significant validation of our innovation path. IASTA has enjoyed a sustained 90% retention rate in an industry where common rates hover at 65-70%. This success is possible only through our dedication to creating value for our clients. Our software platform bundles the requisite capabilities of the strategic sourcing continuum without leaving a footprint inside the enterprise. Our “speed to source” is unparalleled in the industry. And our professional services are wrapped around the software so our clients can focus on what they need to do: Source.

In closing, I understand and sympathize with the challenges that lay ahead for some in the sourcing world. Rest assured IASTA is and will remain committed to this industry. We have been successfully delivering value to our clients for the past decade, and we could not be more excited about partnering with our clients, old and new, to empower sourcing excellence in the coming decade.

Thank you,

David Bush
Iasta- Chief Executive Officer
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