blur Group: Transition, “maverick spend” & a $6 trillion opportunity
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blur Group: Transition, “maverick spend” & a $6 trillion opportunity

Over the last two years, blur Group – which Philip Letts set up nine years ago – has undergone some pretty serious transitions. These saw it hit the press for revenue loss this April. Yet over coffee in west London, Letts explains the wider plan. 

The company offers a marketplace for B2B services. The term that gets bandied about a lot – and is often attributed to Letts is ‘the eBay for business’, but he clarifies: “We’ve certainly never called it that”.

In fact, the platform aims to connect companies with service providers. And fundamentally seeks to help large organisations solve the massive problem of indirect, unaccounted for spending.

The big idea is to put everything in one place so that purchasing departments can tender any service they require in a solid, trusted environment and get enough high-quality responses to make an informed, business decision. ‘Marketing’ and ‘Technology Services’ are the two most sought services, says Letts, but it also has ‘HR’, ‘Creative Services’ and ‘Property Services’.

The wider issue of unmonitored spending – “unmanaged”, “maverick” or the “tail problem” as it is officially known – amounts to 20% of spending in most large companies, explains Letts. In practice these are usually the “millions of purchases that are too small to be handled by procurement or too infrequent to be included in catalogue system” clarifies this Accenture white paper [PDF] from last year which looks the problem in some detail.

So, based on this it sounds as if blur Group has a pretty decent offering. It came about as so many platforms – like Ariba – offer help with more obvious forms of spending. And the publicity material we were initially sent impressively couched it as: “Welcome to my $6 trillion world…” in reference to the Frost & Sullivan prediction that the B2B eCommerce market will be worth $6.7 trillion by 2020.

Letts also has a lot of experience as an entrepreneur having previously co-founded Beenz.com, Tradaq.net and mobile technology startup Surfkitchen. So, why all the fuss earlier this year?

When the company started out it focused on attracting SMES to provide a proof of concept, explains Letts. As it solidified it switched its focus on medium and large companies and now it specifically targets companies with a purchasing department. These include Argos and GE and a lot of very big businesses in the pilot phase that do not wish to be named yet.

With larger companies, unmanaged spend “is the bigger end of the problem,” says Letts. It can be huge and solving it can help truly accelerate digital transformation in the enterprise. However, if you’re a multi-million dollar company you’re unlikely to talk about this problem until it has been tackled. For some organisations, Letts adds, it can take two months to even identify how big the spend it.

To create an entire market place from scratch which answers the needs of a massive enterprise is no mean feat and “the bulk of our work has been building enough services providers” says Letts. A running counter on the website currently boasts over 65,000 service providers in 145 counties.

If someone comes on board it is important that there are enough providers to offer a decent shortlist of three, clarifies Letts. And it is also crucial that no more than 20% of their existing suppliers are on there.

Over time, this “should become a standard interface for players to buy and manage indirect spend across the business,” says Letts. It should help companies buy more efficiently and by token improve organisational productivity.

The message to the press earlier this year was that 2014 was a year of transition, 2015 was about growing the business and profitability should come early 2016. So how far along is it on the journey?

“Being a public company I can’t answer that,” says Letts. The company later issued a statement saying it was “satisfied” with progress.

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Kathryn Cave

Editor at IDG Connect

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