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Tom Beaty Elected to Army War College Foundation’s Board

Atlanta entrepreneur among five new Trustees elected to join the Foundation’s Board this year ATLANTA, Georgia — October 2, 2018 — Insight Sourcing Group is proud to announce the election of its founder…

Atlanta entrepreneur among five new Trustees elected to join the Foundation’s Board this year

ATLANTA, Georgia — October 2, 2018 — Insight Sourcing Group is proud to announce the election of its founder and CEO, Tom Beaty, to the Army War College Foundation’s Board of Trustees. Beaty is among five new Trustees elected to join the Foundation’s Board this year.

“It’s a tremendous honor to be able to support the U.S. Army War College in its vital mission by serving with the Army War College Foundation,” said Beaty.

AWC---JPEG — Tom Beaty (back row, fifth from left) pictured with the Army War College Board of Trustees

The Army War College Foundation is a non-profit organization that provides the “margin of excellence” to the academic experience of resident and distance students at the U.S. Army War College. The Foundation enhances the educational experience of these students through stewardship of many key programs.

The purpose of the U.S. Army War College is to produce graduates who are skilled critical thinkers and complex problem solvers in the global application of strategic land power. Concurrently, it also acts as a “Think Factory” for commanders and civilian leaders at the strategic level worldwide and engages in discourse and debate on the role of military forces in achieving our national security objectives. Top performing officers, typically Colonels, from all branches of the U.S. military plus Allies participate in a 10-month educational experience earning a Master’s degree in Strategic Studies. In 2017, Tom Beaty participated in the National Security Seminar which takes place during the final week of the program. Beaty and other civilians engaged in discussions with the next generation of senior leaders of the U.S. Armed Forces, providing these leaders with a deeper understanding of perspectives across the American society they serve.

Beaty founded Insight Sourcing Group in 2002 and has grown it into the premiere boutique consulting firm focused exclusively on strategic sourcing and procurement-related cost optimization. Around the same time, he founded the Witness to War Foundation, a 501(c)(3) oral history preservation non-profit dedicated to capturing and preserving the first-hand accounts of our nation’s combat veterans. Witness to War has interviewed veterans of nearly every war and conflict dating back to World War II, and houses an impressive collection of nearly 6,000 clips from 2,500 interviews. Tom has personally conducted hundreds of these interviews himself on digital video and both he and Witness to War have been featured on C-SPAN, CNN, Fox News, the Boston Globe, and other major media outlets.

Beaty is a graduate of the University of North Carolina at Chapel Hill with a Bachelor’s degree in Military History and an MBA from the Goizueta Business School at Emory University.

About Insight Sourcing Group

Insight Sourcing Group is the leading boutique consulting firm in North America focused exclusively on Strategic Sourcing and procurement-related services. The firm works with senior executives and procurement leaders to accelerate savings through Strategic Sourcing; increase Spend Visibility through it’s proprietary spend analytics tool, SpendHQ; create rapid, quick-hit savings opportunities via its group purchasing division, InsightGPO; and helps clients reduce both their energy costs and demand through its Enterprise Energy Solutions division. Learn more at insightsourcing.com.

About the Army War College Foundation

The Army War College Foundation, Inc. is a publicly supported and IRS designated 501(c)(3) non-profit organization that raises funds and provides other assets to enrich the College’s academic programs, research activities, and overall campus environment. Located at Carlisle Barracks, Pennsylvania, it aims to enhance the excellence of both faculty and students. Its mission is to assist the Army War College and carry out its critical role in the preparation of outstanding strategic leaders. Learn more at usawc.org.

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Atlanta Consulting Firm Named Best Place to Work for 11th Straight Year

Atlanta-based procurement consulting firm named a top workplace for the eleventh consecutive year ATLANTA, Georgia – September 10, 2018 – The leading procurement advisory firm, Insight Sourcing Group, continues its legacy of being…

Atlanta-based procurement consulting firm named a top workplace for the eleventh consecutive year

ATLANTA, Georgia – September 10, 2018 – The leading procurement advisory firm, Insight Sourcing Group, continues its legacy of being one of Atlanta’s top workplaces, earning a top spot on the Atlanta Business Chronicle’s 2018 list of Best Places to Work. The list highlights the top 100 companies who have invested as much in their employees’ well-being as they have in their company offerings. Insight Sourcing Group was named the #2 medium sized employer, marking its eleventh consecutive year on the list.

ABC — The Insight Sourcing Group team at the Best Places to Work awards ceremony. The firm was named the #2 Best Place to Work in Atlanta.

“It’s a huge honor to once again be named a top workplace in Atlanta,” said Brent Eiland, President of Insight Sourcing Group. “This is a testament to our incredible team and the culture we’ve built together. Our culture not only reflects what we do, it defines who we are and what our values represent.”

Each year, the Atlanta Business Chronicle teams up with Omaha-based Quantum Workplace to find the metro area’s superior employers. Earlier this spring, Insight Sourcing Group and other metro Atlanta employers were nominated by the Chronicle’s readers, and then Quantum surveyed their workers during June and July to find those organizations where employees are the most engaged. Quantum ranked the top employers in four categories: the top 10 among extra-large employers (500 employees and up), the top 20 among large employers (100 to 499 employees), the top 20 among medium-sized employers (50 to 99 employees), and the top 50 among small employers (10 to 49 employees).

Other distinguished awards for the firm recently include its eleventh straight year on the Inc. 5000 list of fastest-growing private companies; #3 on the AJC’s Top Workplaces list; being named the #1 most innovative consulting firm in the country by Vault.com, and two prestigious SIIA CODiE awards for best data visualization technology and best big data analytics solution for its SaaS-based spend analytics platform, SpendHQ.

To view the full list of Atlanta’s Best Places to Work in 2018, click here.

About Insight Sourcing Group
Insight Sourcing Group is the largest boutique consulting firm in North America focused exclusively on Strategic Sourcing and procurement-related services. The firm has developed a reputation for the collegiality and high caliber of its team, its tremendous focus on client results, its entrepreneurial and innovative approach to the space, and for its ability to consistently deliver strong outcomes. The firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices. Insight Sourcing Group has worked with hundreds of corporate clients of all sizes and over 50 Private Equity firms. Learn more at www.insightsourcing.com.

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Insight Sourcing Group Named a Top Boutique Firm for Fifth Straight Year

Atlanta-based procurement consulting firm ranked the #2 Best Boutique Firm by Vault.com ATLANTA, Georgia — August 27, 2018 — Insight Sourcing Group announces today that it has been ranked the #2 Best Boutique Consulting…

Atlanta-based procurement consulting firm ranked the #2 Best Boutique Firm by Vault.com

ATLANTA, Georgia — August 27, 2018 — Insight Sourcing Group announces today that it has been ranked the #2 Best Boutique Consulting Firm by Vault.com, its fifth straight year within the top 3. The Best Boutique Firms sub-ranking is part of Vault’s 2019 Consulting Top 50 listing of the country’s best firms to work for. Insight Sourcing Group previously ranked #1 in 2015, 2016, and 2018.

Insight Sourcing Group also ranked highly for firms with the greatest work / life balance (#2), overall employee satisfaction (#4), and the best firms for innovation (#4), putting it ahead of some of the largest and most respected consulting firms in the U.S. And for the first time in its history with Vault, Insight Sourcing Group made the 2019 Best Firms for Diversity list, demonstrating its commitment to creating a work environment that is inclusive for all.

“It is an honor to be recognized as a top consulting firm by Vault once again,” said Brent Eiland, President of Insight Sourcing Group. “We take great pride in our firm, our culture, our team, and the quality of the work we deliver in support of our clients. Our amazing team members continue to make this a special place to work and help us in our ongoing effort to never settle or become satisfied with past accomplishments. We strive for constant improvement in all facets of our business, and our inclusion this year in new areas, like diversity, prove that we are continuing to get better together.”

The Vault Consulting 50 rankings are based on scores from almost 17,000 consulting firm employees surveyed earlier this year, who were asked to rate firms on a scale of 1 to 10 based on a variety of factors that include prestige, firm culture, compensation, work/life balances, the outlook for the firm, and overall satisfaction.

To view the full Vault Consulting Top 50, click here.

About Vault
Vault.com provides in-depth intelligence on what it’s really like to work within an industry, company, or profession—and how to position yourself to launch and build the career you want. Vault is best known for its influential rankings, ratings, and reviews on thousands of top employers and hundreds of internship programs. The data used to compile these rankings and reviews are collected and verified through directed surveys of active employees and enrolled students. Vault also welcomes employees and students unable to participate in directed surveys to submit online reviews on their experiences, salaries, interviews, and more. Vault’s rankings and ratings are regularly featured and cited by the New York Times, the Wall Street Journal, Bloomberg BusinessWeek, Forbes, Fortune, Money, and countless other news outlets. Learn more at www.Vault.com.

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Local Park Revived by Insight Sourcing Group & Park Pride

Atlanta-based consulting firm holds first company-wide community service event by cleaning up a local park ATLANTA, Georgia — August 6, 2018 — As part of Insight Sourcing Group’s continued commitment to giving back…

Atlanta-based consulting firm holds first company-wide community service event by cleaning up a local park

ATLANTA, Georgia — August 6, 2018 — As part of Insight Sourcing Group’s continued commitment to giving back to its community, the firm kicked off its first company-wide volunteer event in partnership with Atlanta-based Park Pride, a nonprofit organization that engages communities in their neighborhood parks through volunteer projects, community gardens, community-led park redesigns and by providing grants for capital park improvements.

“A park without people is just a greenspace,” says John Ahern, Volunteer Manager at Park Pride. “So by creating a cleaner, safer and more accessible park, more neighbors will feel welcomed and encouraged to come out and play together, further developing pride in the neighborhood and bonds in the community. ”

On Friday, August 3rd, over 100 ISG employees met at Montreal Park (located in nearby Tucker, Georgia) to execute a number of projects intended to make the park cleaner, safer, and more accessible for local families. Some of the projects included rebuilding picnic tables and benches, mulching trees and entrance areas, and limbing trees and clearing overgrown vegetation to provide better and safer lines of sight into the park.

The Montreal Park project is the most recent example of the passion Insight Sourcing Group employees have for investing their time to make a difference within the community. Earlier this year, the firm held a canned food drive and volunteered at the Atlanta Community Food Bank where they packed over 17,000 pounds of food for senior citizens. Last fall, employees spent the afternoon on the Veterans Empowerment Organization‘s campus landscaping and planting flowers for senior residents.

“This was a great reminder that it’s not always about the business, and you have to give back,” said Tom Beaty, founder and CEO of Insight Sourcing Group. “Our team put an extraordinary amount of effort into the day and we’re excited to see the impact it’s going to have on this neighborhood.”

About Insight Sourcing Group

Insight Sourcing Group is the largest boutique consulting firm in North America focused exclusively on Strategic Sourcing and procurement-related services. The firm has developed a reputation for the collegiality and high caliber of its team, its tremendous focus on client results, its entrepreneurial and innovative approach to the space, and for its ability to consistently deliver strong outcomes. The firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices. Insight Sourcing Group has worked with hundreds of corporate clients of all sizes and over 50 Private Equity firms. Learn more at www.insightsourcing.com.

About Park Pride

Founded in 1989, Park Pride is the Atlanta-based nonprofit that engages communities to activate the power of parks. Working with over 110 local Friends of the Park groups, Park Pride provides leadership and services to help communities realize their dreams for neighborhood parks that support healthy people, strong neighborhoods, vibrant business districts, a robust economy and a healthy environment. Park Pride is active in greenspace advocacy and educating both civic leaders and the public about the benefits of parks, and annually hosts the Parks and Greenspace Conference. Learn more about Park Pride at parkpride.org.

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[BLOG] Managing the Risk of a Volatile Natural Gas Market

What does an effective natural gas purchasing strategy look like for your firm? The volatile market makes a best-in-class purchasing strategy necessary.

What does an effective natural gas purchasing strategy look like?

by Ben Saunders, ISG Enterprise Energy Solutions

The natural gas market has experienced two major shifts over the last decade. The first shift has been the development of major production centers across the country, creating a more robust supply network outside of the traditional Gulf producing region. The second shift revolves around changing policy, infrastructure, and energy consumption trends which have created new demand drivers for the fuel. Natural gas production is currently at an all-time high as demand for the commodity continues to aggressively trend upwards. In fact, in 2017 the U.S. became a net exporter of natural gas for the first time since 1957 due in large part to an increase in pipeline exports to Canada and Mexico and the rapidly growing LNG export market. Moreover, a growing demand for natural gas by power generators will continue to result in a closer correlation between gas and power prices.

So what does this mean for your utility budget? Six out of the last 10 years, national gas prices have fluctuated by more than 20 percent. With commodity costs accounting for about 70 percent of a utility budget, these types of year-over-year changes can be devastating. And even though we are still in a low price environment, prices on a month-to-month and day-to-day basis are still experiencing significant volatility. Spot prices during peak demand season and during utility restrictions, can break an annual budget due to one volatile month.

The main risks to be addressed by an energy manager are price, service requirements, and counter-party risk, all of which can be addressed through a strategic and proactive procurement approach, best-in-class contracting practices, and disciplined sourcing execution.

Counter-Party Risk – Low price levels and volatile markets in recent years have caused financial strain for many providers, resulting in significant vertical and horizontal consolidation across the energy retail supply chain. There are two problems that stem from this environment. The first is that market consolidation results in more restricted markets for retail customers. Fewer competitive, reliable supplier options require more unique contracting structures and greater transparency to maintain price competitiveness. The second problem is that financial strain on suppliers can result in unforeseen changes to contract obligations. Changes in ownership and calls for credit from suppliers can reduce the total value of the contract to the customer.

Price – Customers are ultimately market takers, and of course, commodity prices rise and fall over time. The goal for a company should not be to beat the market or to expect price decreases every year, but to determine realistic goals based on their businesses needs and market expectations. Does your company value price certainty and budget stability? Is it important that your utility prices are not out of market for any given fiscal period? A company should consider its appetite for budget movement and time horizons for planning when making these decisions.

Service Requirements – Tied closely to price, poor service requirements can alter a budget for scenarios that are not addressed in contracting. A common mistake we see during contracting is that companies do not address pricing and obligations for all volumes and delivery periods throughout the contract. Do your contracts explicitly state pricing points for all volumes? How will your supplier perform during utility curtailments? What communication do you have established with your supplier during adverse market conditions? All of these factors can and need to be addressed during the contracting and award process, and suppliers should be held accountable for maintaining their obligations.

Procurement Strategy: Addressing Risk

Proactive Purchasing: Although customers must deal with both rising and falling markets over time, customers can work to mitigate budget fluctuations from year to year and work to hit internal targets. Many customers have the practice of extending contracts 30 to 60 days from termination. In order for a purchasing strategy to be effective, the market must be monitored constantly for opportunities to achieve internal goals: executing price reductions, hitting budgeted targets, avoiding additional cost increases. Moreover, the strategy should consider how far in advance the business is willing to act and what portion of volume needs should be executed with each purchase. By consistently monitoring and executing prices throughout the year, customers can minimize swings in their budget and reduce the risk associated with each purchase.

Best-in-Class Contracting: Another common mistake is allowing price value to deteriorate through poor contracting practices. Several contracting mistakes include not addressing or understanding a supplier’s delivery obligations, not addressing pricing for all delivered volumes and cost components throughout the term, and allowing for unfavorable extension terms.

Disciplined Sourcing Execution: ISG Energy promotes competition in almost every sourcing event. Creating cost transparency and challenging suppliers to contribute value through creative product offerings, empowers companies to drive the decision process and ultimately retain long-term value. The value created through price competition and transparency shouldn’t be lost because of a lack of understanding of the total value of the contract. Customers should develop the habit of reviewing suppliers’ credit requirements, financial health, operational footprint, and roles with other parties in the supply chain. This will help avoid unforeseen events throughout the term of an engagement that reduce value for the customer.

The natural gas market is at the center of changing policy, regulation, and infrastructure in America. The volatility and risk that this creates for commercial and industrial customers is an unavoidable issue. Customers must be proactive in developing and executing a purchasing strategy that best positions them to effectively manage this cost line item.

Interested in evaluating your current natural gas strategy?

Contact our ISG Energy experts to find savings within your natural gas spend.

Contact Us

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[BLOG] An Environmental Response to BlackRock’s Letter

How your corporate energy strategy can demonstrate a commitment to sustainability while driving operational savings in your organization. [BLOG] ISG Enterprise Energy Solutions.

How your corporate energy strategy can demonstrate a commitment to sustainability while driving savings.

by Mike Muoio, ISG Enterprise Energy Solutions

BlackRock CEO Larry Fink, co-founder of the firm that has since become the largest asset manager in the world, made waves in January with his latest annual letter to CEOs. In the letter, Fink urged executives to acknowledge the societal impacts of their businesses and to use this understanding to inform their shorter-term decisions.

Fink argues that companies without a sense of purpose – those that are unwilling to respond to broader social challenges – will succumb to short-term pressures to distribute earnings, and forgo investments needed for long-term growth. This message from BlackRock coincides with a trend of increasing awareness in the larger investment community of the value in incorporating environmental, social and governance (ESG) factors into investment decisions.

As an investment strategy, ESG analysis is largely a risk management tool that weighs exposure to important societal issues, including employee relations, data privacy, carbon emissions and much more. From a business perspective, exercising leadership on these issues is an opportunity to manage risk, drive investor confidence, improve brand image and build strong relationships with employees and the community – all of which are conducive to long-term value creation. The rise of ESG investing, together with growing demands from shareholders and customers for businesses to embrace social responsibility, will have lasting impacts on how companies make operational decisions.

“Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we adapting to technological change?”
– Larry Fink, Black Rock CEO

While the challenges that Fink alludes to in his letter are exceedingly broad in scope and are in no way limited to environmental sustainability, our clients are already receiving pressure from key customers to address environmental concerns in particular. In the past two months alone, companies such as McDonald’s, Walmart and P&G have each made formal announcements of plans to significantly reduce emissions throughout their supply chains by 2030. As these aggressive targets are rolled out across their operations, the suppliers that exist within these value chains will be heavily impacted by these policies and must begin to plan accordingly.

The good news: incorporating sustainability no longer requires forfeiting returns. For most businesses, the ways in which energy is purchased and consumed is the primary source of carbon emissions. In recent years, the cost of energy projects that address these concerns have plummeted due to falling technology prices. Since 2009, wind farm costs have decreased by 67 percent, while utility-scale solar has seen an 86 percent decline – and corporate renewables procurement has surged in response. The steep drop in prices for renewable energy and energy efficiency technologies has created nationwide opportunities for high-return projects, which can often be structured as cash-flow positive agreements that shield customers from operational risks.

Today, over 130 companies around the globe have committed to going 100 percent renewable, and almost half of the Fortune 500 have set renewable energy or carbon emissions reduction targets. As this market shift continues to unfold, rapid technological advancements and financial innovations are challenging the outdated perception of sustainability and cost-reduction as strictly competing priorities.

*Wood Mackenzie, Limited/SEIA U.S. Solar Market Insight

Fink suggests that executives should include social responsibility in their corporate strategy, and energy-driven emissions reduction initiatives are a logical place to start. Executing on high-return projects with positive environmental attributes should be viewed as a crucial first step towards ESG excellence for any business. Many companies understand this reality but lack the resources and expertise needed to translate a conceptual appreciation of sustainability into real projects – especially those with a compelling ROI.

New opportunities for reducing costs and improving sustainability are emerging across the country; however, the profitability of these projects can be quickly eroded if managed ineffectively. Identifying the right projects for your firm with the right team of energy experts in place to guide implementation will ensure that returns will not be compromised.

Interested in learning more about cost-effective energy projects?

Contact our ISG Energy Experts for a comprehensive energy assessment!

Contact Us

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How to Stop the Leaks & Maximize Your Savings Potential. Tom Beaty

Over the course of the last 15 years, Tom Beaty has grown Insight Sourcing Group (ISG) from a one-man operation to one of the leading procurement and sourcing consulting firms….

Over the course of the last 15 years, Tom Beaty has grown Insight Sourcing Group (ISG) from a one-man operation to one of the leading procurement and sourcing consulting firms. Ranked by Inc Magazine among the fastest-growing private companies in America for the last 10 years, ISG is regularly recognized as one of the nation’s best boutique consulting firms to work for.

In today’s episode, I start by asking Tom what he is seeing in the field today in terms of the key challenges that CPO’s are facing, and some of the ways that they are working to solve those challenges. We then focus on the topic of “what comes after sourcing”. We explore the startling statistic that only 60% of “addressed” spend is actually spent with the contracted supplier, and specifically, how can procurement professionals address and mitigate the risk of the savings leakage that occurs as a result.

“In indirect spend, it consistently is around 60% goes to the correct vendor. We’ve got different ways that we model that. And that data is pretty consistent with what other research firms have seen. You think about that and it’s like “That’s crazy!”… It’s so consistent across different companies regardless of the maturity level that you just have to begin to wonder what’s going on.”
Tom Beaty

Click Here to Listen

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Forbes Names ISG a Top Consulting Firm for 3rd Straight Year

For the third straight year, Forbes has ranked Insight Sourcing Group on its annual list of America’s Best Management Consulting Firms for 2018.

Atlanta-based Procurement & Strategic Sourcing Firm Listed as One of America’s Best Management Consulting Firms for 3rd Straight Year

ATLANTA, Georgia — April 24, 2018 — For the third straight year, Insight Sourcing Group has been ranked on Forbes’ list of America’s Best Management Consulting Firms for 2018.

Clients ranked Insight Sourcing Group high in several functional areas and industry sectors including:

Chemicals & Pharmaceuticals
Consumer Goods & Retail
IT, Technology, & Telecommunications
Operations
Other Industrial Goods
Supply Chain Management
Travel, Transport & Logistics

To create the list, Statista surveyed 7,500 partners and executives of management consultancies, as well as 1,000 senior executives who had worked with such firms over the last four years. Respondents were asked to recommend consultancies across the predetermined sectors and functional areas; self-nominations were not considered. Statista then identified the firms with the highest number of recommendations and organized them into star ratings: five stars for “very frequently recommended,” four stars for “frequently recommended” and three stars for “recommended.” A total of 229 management consulting firms made the final ranking.

To view the complete list of America’s Best Management Consulting Firms for 2018, click here.

About Insight Sourcing Group

Founded in 2002, the firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices. Insight Sourcing Group has worked with hundreds of corporate clients of all sizes and over 50 Private Equity firms.

Typical client results include 20% average savings per indirect spend category, 5 – 15% for direct spend categories, 400 – 600% first-year return on investment, and project payback periods measured in months.

Inc. magazine has ranked Insight Sourcing Group among the fastest-growing private companies in America every year since 2008, making it one of the few firms to be listed 9 years in a row as of 2016. Insight Sourcing Group was also recently named the #1 Boutique Consulting Firm To Work For in the US in 2016 by Vault.

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Office Equipment Market Update – March 2018

Fujifilm Plans to Acquire Xerox Fujifilm has announced plans to acquire Xerox in an effort to create a new combined Fuji Xerox company. The deal comes after declining revenue resulting…

Fujifilm Plans to Acquire Xerox

Fujifilm has announced plans to acquire Xerox in an effort to create a new combined Fuji Xerox company. The deal comes after declining revenue resulting from reduced demand for copiers and printers at Xerox and pressure from shareholders to improve performance and / or change leadership. As a part of the deal, Fujifilm has announced that it plans to lay off 10,000 Fuji Xerox workers. While many expect the deal to go through, there is still some pushback from investors.

While the Xerox acquisition by Fujifilm is still unfolding, the events reflect uncertainty around how to adapt to declining sales from Xerox, who in 2017 split its business process outsourcing operations from its core business in a similar effort to improve profitability. The Office Equipment industry as a whole is certainly undergoing change as suppliers adapt to declining hardware sales and are attempting to refocus their business strategies. With the change and uncertainty in the industry, Insight Sourcing Group is continuing to monitor the market and ensure that our 800+ Office Equipment GPO members are receiving best-in-class value and service. The Xerox acquisition is unlikely to be the last shake-up in the industry and, instead of having to monitor the daily news for activity, InsightGPO members can be assured that our team is constantly looking to make sure that members have as much stability as possible.

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Office Supplies Market Update

Office Supplies Market Update – March 2018 Following the failed merger of Staples and Office Depot in mid-2016, both office supplies chains are being forced to find ways to forge new paths…

Office Supplies Market Update – March 2018

Following the failed merger of Staples and Office Depot in mid-2016, both office supplies chains are being forced to find ways to forge new paths in an increasingly competitive landscape with pressures from many sides, including the digitization of office environments and the proliferation of e-commerce sites like Amazon.

With office supplies spend decreasing across the breadth of their customer bases, retail stores declining in sales year-over-year, and the sell-off last year of both organizations’ international business units, each organization believed that major changes were necessary to remain competitive in an increasingly competitive landscape. In late 2017, both companies have signaled their responses to these pressures and taken steps toward major market-shifting strategies that demonstrate how they may plan to face the future.

Office Depot / CompuCom Merger
In late 2017, Office Depot acquired technology services provider CompuCom for $1 billion. Traditionally, office supplies companies have viewed themselves as one-stop shops for office spaces. However, this concept focused primarily in highly-commoditized areas, like paper/printer supplies/filing, etc. As businesses have become increasingly diverse and broad, their operating needs have expanded outside of traditional office products, and price pressures in these areas have forced traditional office suppliers to look outside of standard products for growth. Office Depot believes that, in the long term, businesses and consumers alike will need technology support on a more frequent basis.

In this sense, Office Depot’s purchase of CompuCom serves as a way to both increase their product offering outside of traditional office products and serve the continually digitizing nature of businesses today. Furthermore, in creating a dependency by clients through their IT products/services, Office Depot could see less attrition of accounts on the product side (office supplies, facilities supplies, furniture, etc.) to competitors with an exclusive product focus. This strategy for broadening its lines of business through the lens of technology exists in competition with Staples’ strategy of expanding its touch points with its customers through broadened product offerings alone. Only time will tell which strategy offers the best path forward but expect Office Depot and Staples to try to find more touchpoints to latch onto within their customers’ spend stacks.

Sycamore Partners Acquires Staples
Announced in mid-2017 and finalized in late 2017, Staples was acquired by the private equity firm Sycamore Partners for $6.9 billion. Sycamore Partners, a private equity firm that still believes in the power of the retail store, has holdings in Belk, Dollar Tree, Hot Topic, and Talbots among others. As its largest buyout to date, Sycamore Partners is betting big on Staples and its retail presence.

In a quickly changing office supplies market with only two large players, it is yet to be seen how Sycamore Partners plans to alter Staple’s sales strategy and product offering. Although this acquisition has generally been reported on in a positive light, Staples did have to take on over $4 billion in debt to finance this transaction. How Staples handles this new debt and the strategy shifts brought about by Sycamore’s leadership will prove to be important points to monitor in the coming months.

InsightGPO will continue to monitor how these changes affect business-to-business sales, group purchasing strategies, and the overall competitiveness of the office supplies industry. As new opportunities arise from these companies broadening their value propositions, InsightGPO will be evaluating how to incorporate these new offerings into the existing InsightGPO office supplies program and, ultimately, drive value for our clients. Please reach out to us if you have any questions, and we will continue to keep you updated on this ever-changing market.