Emptoris Announces Growth Acceleration, Next Generation Spend Analysis Solution


Emptoris Announces Growth Acceleration, Next Generation Spend Analysis Solution

New Spend Analysis Products Extend Value of ERP and Business Intelligence; Deliver Comprehensive Spend Visibility

BURLINGTON, Mass., Nov. 15 // - Emptoris, the leading provider of Enterprise Supply and Contract Management solutions, announced today that it has recorded 86% year-over-year revenue growth for the third quarter of 2006. The company said its growth has been fueled in part by large companies switching from competitor offerings to the Emptoris platform.

Emptoris also announced the release of the latest version of its market-leading Spend Analysis solution. The new spend analysis offering is designed to augment a company's ERP, data warehouse and business intelligence strategies, and take those IT driven efforts to the next level in accuracy and spend visibility.

The new spend analysis offering includes a Spend Data Manager and a Real-time Spend Classifier, as well as major enhancements to Emptoris' Spend Analyzer and new Spend and Contract Visibility offerings. Emptoris is also offering new Data Extraction consulting services designed to dramatically accelerate the delivery timeline for comprehensive spend visibility. Emptoris customers attain enterprise-wide spend visibility in as little as three months, a marked improvement compared to companies that rely solely on an ERP, Business Intelligence or data warehouse solutions. Emptoris Spend Analysis software augments these existing systems as either a service delivered on-demand or as behind the firewall on-premise software.

Competitive Wins Drive Record Results

Throughout the third quarter, Emptoris won significant new business, and took away large marquee accounts from Ariba. Emptoris recorded its strongest quarter ever with 50 transactions contributing to 86% revenue growth over the third quarter of 2005.

During the first three quarters of 2006 Emptoris experienced revenue growth of 78% compared to the first three quarters of 2005. The company also reported that a sales backlog, which represents the value of future revenues in multi-year subscription contracts, exceeds the company's 2006 revenues (year to date) due to strong demand for the company's software as a service (Saas) delivery model. International deals continue to represent a significant growth engine for Emptoris, as do deals signed by channel partners.

A representative sample of the large new customers who signed with Emptoris in the third quarter include a top global maker of telecom equipment; a leading global oil and gas company and former marquee Ariba sourcing customer; one of the U.S.'s largest health insurance providers; and a North American leader of electrical and electronic products and long time Ariba customer. Emptoris also benefited from large deals won through channel partners, including one of the largest U.S. government agencies, and a channel partner's outsourcing deal of a major telecommunications provider in the Asia Pacific region.

Spend Visibility Critical to Procurement Transformation

"We're a global company with widely dispersed operations and procurement needs," said Mitchell E. Plaat, vice president, Procurement for Con-way. "We selected Emptoris as the best solution to support our Procurement Modernization Initiative, which will significantly improve how we manage and execute our spend with 35,000 suppliers. This platform provides powerful workflow and sourcing management tools, and by instituting visibility through a common process, we are better able to categorize, analyze and control spend performance, ultimately reducing our costs."

The Emptoris Spend Analysis Solution has received independent recognition for being the premier spend solution in the market. In the November 2005 report entitled "The Forrester Wave(TM): eSourcing Suites, Q4 2005," Forrester gave Emptoris a perfect score and the top ranking for its current spend analysis product offering. Emptoris customers have analyzed over $9 trillion in corporate spend and from 440 billion transactions using Emptoris Spend Analysis.

Spend analysis drives more informed sourcing strategies by aggregating demand, leveraging purchasing volume, consolidating suppliers and maximizing savings from merger and acquisition driven strategies. Companies can also ensure spend compliance by realizing vendor rebates, reducing maverick spending, enforcing contract compliance and meeting budgetary goals. According to research by Aberdeen Group, this can yield savings of 2% to 15% across spend categories.

Emptoris Extends Value of ERP Solutions

"If you want to manage spending effectively, you need to be able to measure spending," said Andy Kyte, vice president and research fellow with Gartner. "This is a gigantic challenge for most enterprises. Typical approaches that create complex data warehouses based solely on invoice line data generally fail to generate a positive return on investment (ROI) because of their inability to show the spend data in context. Companies need to take an approach that can effectively collect, cleanse and categorize data from disparate sources to provide a deep, manageable view into spending at the category level."

According to a survey by Emptoris and the Institute of Supply Management, companies face significant obstacles to gaining spend visibility. These challenges include poor data quality, aggregating data from multiple systems, spending not linked to contract obligations, and transaction data not mapped to commodities. In fact, more than 56% of procurement and financial executives surveyed complained of substandard spend data quality at their organization.

"Despite the best efforts to standardize on ERPs, spend data quality problems remain," said Avner Schneur, CEO of Emptoris. "What's more, business requirements drive deployment of new applications and periodic mergers and acquisitions of companies that have their own systems, make IT reactive, with standardization efforts an illusive goal. Poor analytics and toxic data locked inside ERP systems make it impossible to gain a comprehensive view of spend."

"Even if companies have pursued an ERP solution, a data warehouse solution, or a business intelligence solution, they can now augment these initiative with new key technology offerings from Emptoris, to gain true spend visibility using these existing investments, in as little as three months." said Schneur.

New Emptoris Spend Analysis Offerings Drive Greater Value

Emptoris has been providing a complete Spend Analysis solution for over 5 years. The new offerings are designed to augment a company's ERP, data warehouse and business intelligence strategies, and take those IT driven efforts to the next level in accuracy and spend visibility. The new product offerings include the Spend Data Manager, and the Real-time Spend Classifier. Major enhancements have also been made to Emptoris' Spend Analyzer and Spend and Contract Visibility offerings. New Data Extraction consulting services dramatically accelerate the delivery timeline for comprehensive spend visibility.

o New Spend Data Manager - Self-serve Data Classification, Takes ERP to
Next Level
Many companies use their ERP or Business Intelligence solution for spend
analysis. However, these companies still struggle with poor data
quality and poorly classified spend data. With this release, Emptoris
now offers these companies the ability to manage the spend data
consolidation, classification and enrichment process in-house. With
the Emptoris Spend Data Manager, companies now have a way to extend the
value of the investment in the ERP and Business Intelligence Solutions
by getting higher quality spend data faster while still controlling the
data and ensuring its security. The Spend Data Manager allows
companies to take aggregated financial and purchasing transaction data
from multiple systems, run it through powerful auto-classification
engines that leverage vendor and item knowledge-bases, and transform it
into procurement intelligence.

The Emptoris Spend Data Manager uses the widest selection of automated
classification techniques, including Bayesian, Natural Language
Processing and Nearest Neighbor algorithms, which are ideal for
classification based on purchase order text descriptions. In addition,
advanced rules-based classification is provided for indirect spend
where very limited information is often available in item text
descriptions. With over $9 Trillion in spend analyzed, Emptoris now
provides customers with thousands of pre-built rules within the Spend
Data Manager's knowledgebase. Machine learning and automated end-user
feedback, which automatically create additional classification rules,
ensure continuous improvement of spend classification.

o New Real Time Spend Classifier - Better Data and Compliance Upfront
The new Real-time Spend Classifier closes the loop for spend data
classification and provides more accurate and granular classification
of spend data. By plugging into ERPs and tactical purchasing
environments and classifying spend at the point of purchase, Emptoris
is driving 'cleaner' data upfront. The Real Time Spend Classifier also
performs real-time contract analysis to provide the buyer with
information on available contracts, thus reducing off-contract
spending. The Real Time Spend Classifier integrates with the
customer's requisition and purchase order systems and leverages
Emptoris' vast vendor and item knowledge base, as well as detailed
contracts information.

o Expanded Spend Analyzer - Rapid, Insightful Analysis with Greater Usage
and Capacity
The Emptoris Spend Analyzer provides end users with insightful analysis
with lightning fast, on the fly multi-dimensional analytics, and drill
down capabilities to individual transactions. The multi-dimensional
analytics provides end users with instant access to spend transaction
data across any number of dimensions and the ability to drill into and
refine the spend data views without needing to write new reports or
create complex queries. Companies seek to maintain this rapid
interactive response with ever increasing transaction volume, more
dimensions of data and a greater numbers of concurrent users. They
also require an enterprise class solution that provides global
security, reliability and global scale. With Spend Analyzer, Emptoris
extends its enterprise spend analysis leadership with the ability to
analyze hundreds of millions of transactions, view spend information
across twenty to thirty dimensions, and support hundreds of users,
without compromising on instant "slice and dice" and individual
transaction drill-down capabilities.

o Expanded Spend and Contract Visibility - for Contract and Spending
Insights
Emptoris provides enhanced Spend and Contract Visibility, which allows
companies to analyze spend against contracts to reduce maverick (off
contract) spend, realize vendor rebates more quickly and enforce
contract compliance. Companies can now see in one analytical view
which vendors have contracts, how spending aligns against contracts,
which organizations are buying from contracts and how much they are
spending.

o New Data Extraction Services - Faster Time to Value
Emptoris also announced a new Data Extraction service, providing
companies with expert guidance on how to accelerate spend visibility
projects. To gain global spend visibility quickly many companies need
to tap into multiple enterprise applications' data. Having worked with
all types of data repositories and transaction systems for dozens of
customers, Emptoris now provides Data Extraction Services to help
companies access and quickly make use of this data in a consistent and
timely manner.

Customer Success and Benchmarking

Emptoris customers have pursued many different approaches for spend visibility prior to Emptoris including ERP, data warehouse and business intelligence solutions. They have augmented these initiatives with Emptoris Spend Analysis to gain true spend visibility. Some real-world examples include:

o Con-way Inc., a $4.3 billion freight trucking and global logistics
company, utilized Emptoris Spend Analysis to gain global spend
visibility across 170 commodities and five business units for the first
time, leveraging information from source systems including Oracle,
Purchasing Card and Credit Processing databases.

o A $4 billion chemical company, which had standardized on one global
instance of SAP, came to Emptoris because they considered their spend
data beyond repair. With Emptoris Spend Analysis, this company was
able to analyze $6 billion dollars of spend made up of 3.7 million
transactions in 33 currencies to save over $40 million in one year.

o A $4 billion life sciences company achieved spend visibility by
analyzing spend transactions from 10 instances of SAP. Previous
approaches using only the SAP business data warehouse with a Cognos
front-end were dropped due to poor data quality, high cost, a multi-
year implementation, and the inability to see the spend data in
context.

o A global 500 grocery retailer analyzed $9 billion in spend and achieved
over $360 million in savings in eighteen months by aggregating
13,000,000 transactions from legacy applications in six operating
companies into 300 commodity groups.

o A global 100 consumer packaged goods company achieved spend analysis in
90 days by using the Emptoris Spend Analysis solution. $1.9 billion of
spend data was consolidated from 19 SAP systems in ten languages and
ten countries. 30 currencies were consolidated into one, 1.2 million
transactions were consolidated into 400 commodity codes and 185,000
unique items. 64,000 vendors were consolidated into 32,700 corporate
entities.

Benchmarking across Emptoris' spend analysis customer base identified the following trends:

o Customers are seeing increasing value by analyzing spend data along
dimensions: over 60% of customers look at spend data across 12 or more
dimensions, and over 30% utilize 15 or more dimensions. In addition to
basic supplier, category, and time dimensions, additional dimensions
include supplier diversity status, preferred supplier status, supplier
performance and scorecard information, budgetary information, on/off
contract, contract performance and ISO certification.

o Customers are classifying spend at even deeper levels of granularity.
Over 70% of customers classify spend three to six levels deep in the
commodity taxonomy. Several companies use UN/SPSC, although over 60%
use their own custom taxonomies for additional value.

o Over 58% of companies 'snapshot' or update their spend data on monthly
basis. 26% use quarterly refreshes and the rest use 6 month or annual
refreshes.

Upcoming Thought Leadership Seminar

To find out more, and listen to how Cardinal Health, one of Emptoris' customers, utilizes spend analysis to drive business impact, you can register for the web seminar "Overcoming the Challenges to Achieving Greater Spend Visibility." Cardinal Health will be joined by industry thought leaders from Purchasing Magazine and analyst firm Forrester Research to discuss how companies can achieve greater value from enterprise-wide spend visibility. This event takes place on December 5, 2006, at 2 p.m. Eastern. For more information and to register for this event, go to: www.emptoris.com/spend.

About Emptoris

Emptoris is the world leader in innovative supply and contract management software solutions that empower enterprises to realize best value and accelerate profitable growth. Emptoris solutions are used by successful Global 2000 companies in every industry. Customers include American Express, Boeing, Dow Corning, GlaxoSmithKline, Motorola, Owens Corning, Samsung America, Toro and Vodafone.

For further information, contact:

Source: Emptoris

CONTACT: Paul Green of Emptoris, Inc., +1-781-852-2817, pgreen@emptoris.com

Web site: www.emptoris.com/

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