Interesting Call from Craig-Hallum Regarding ICG Commerce

Over the past few months I have been approached by an increasing number of industry veterans from both the end-user (client) side of the supply chain market, as well as the analyst/vendor camps requesting and providing information on emerging market trends.

This morning I spoke with a top analyst from Craig-Hallum who provided some background information on his organization including the fact that 80% of his time was focused on technology companies including Ariba, Nuance and ICG Commerce.  Of those covered, ICG Commerce was the main focus of his call.

As I had indicated during the conversation, ICG appears to be in both an interesting and unique space in that they provide the balance between the emerging BPO services model that the market is looking to embrace (or at least showing inclinations towards doing so), while satisfying the lingering “no one has ever been fired for buying IBM” mindset at the senior executive level.

One of the questions this led to was centered on the premise that as ICG succeeds and in the process legitimizes (if that is the right word) this new business model thereby opening the door to increased competition (and pricing), what is the strategy going forward in terms of sustained profitability.  In essence, will the company have to generate more revenue down the road to maintain their present day earnings level?

It would also be interesting to consider the impact of ICG Commerce’s North American presence versus for example Genpact, who are one of the top five Indian BPO firms (according to NASSCOM) relative to the development of the North American market.  Especially since Indian software engineering talent has made that country the off shoring destination of American high-tech firms, each of which have committed to investing $1 billion into its economy.  (Note: the Clark and Fourastie three (now four) sector hypothesis is an important reference point in this regard as the impact of outsourcing and off shoring extends well beyond the industry itself.  Here is a link to an article I wrote titled Buy American: Establishing Artificial Boundaries or Removing Unwanted Barriers that you will find interesting as it takes a larger economic view of industries such as the one within which ICG operates.)

It will also be interesting to see how the market will unfold in terms of adoption.

According to a McKinsey report, the global “addressable” BPO market is worth $122 – $154 billion with industry sectors such as retail banking, insurance, travel and hospitality and auto leading the way.

However, and given this Friday’s interview with Colin Cram regarding the focus of his “Towards Tesco – improving public sector procurement” paper which discusses the potential for an outsourcing and shared services strategy to save the UK Government £25 billion per year, one cannot discount the public sector as both a viable and therefore important market.

You will find the details for this upcoming PI Window on Business segment, including a PI Inquisitive Eye TV overview below.

PI Inquisitive Eye TV (Towards Tesco – Improving Public Sector Procurement)

Another video bite from PI Inquisitive Eye (Television Unscripted) which provides an introduction to the April 9th PI Window on Business segment in which I will be interviewing Colin Cram about his seminal paper Towards Tesco – Improving Public Sector Procurement.

In the paper, Cram provides the outline for a tangible road map that he states will save the UK government £25 billion per year.  The interview will focus on the specifics of his plan.

Vodpod videos no longer available.

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