Following recent media reports which alleged that New York City has been overpaying for its implementation of procurement software, Spend Matters’ US analyst Pierre Mitchell went on a mission to set the record straight. The reports have used a watchdog group’s analysis to attempt to compare the seemingly high price tag of the NYC implementation by suite provider Ivalua to that of a smaller implementation of the city of Dallas by a more niche software provider, Bonfire. Ivalua and Bonfire are two procurement software providers that procurement tech experts Spend Matters covers within its broad procurement provider ecosystem, and, he says, “we are not comparing apples with apples in these two transformation events.”
“Our analysis indicates that one report’s direct comparison of these costs is misleading and flawed,” he continues.
NYC is overhauling its procurement operation across the city, and Dallas is doing something similar, on a different scale. Media reports suggest that NYC is paying about $45 million for its project while Dallas is doing it for just $50,000. The reports allude to the fact that the watchdog finds that the taxpayers of NYC are getting a ‘raw deal.’
“Unfortunately,” says Mitchell, “its conclusions are reached based on faulty analysis. NYC’s massive procurement transformation and technology implementation project for end-to-end procurement using Ivalua is completely different in scope and scale to Dallas’ small deal for a hosted e-sourcing tool from Bonfire. This isn’t just comparing apples to oranges, it’s comparing a watermelon to a grape.”
He concludes that while watchdog firms can provide a valuable service to the public, more input from experts in the procurement technology field can help make these assessments fairly and accurately. In terms of these two vendors, Spend Matters compare about 60 of these providers across hundreds of requirements using its SolutionMap assessment methodology, which is by far the deepest competitive intelligence database for procurement technology solutions in the industry.
He goes on to explain the differences between the two vendors in some detail, how each have their own capabilities depending on customer needs and requirements, and what makes up the cost difference in each of these two cases, so much so that the NYC cost actually turns out to be good value!
Beware what you read – is the message! “Hopefully the next story about NYC procurement in the business press will be some of the proven results generated by applying these commercial best practices and technologies to make the best use of limited tax dollars,” he says.
Read his detailed and interesting findings and analysis in full here.