5 minutes with… Priya Iyer, CEO of Concertiv
The Drawdown (TDD): First things first, what does Concertiv do?
Concertiv is the leading provider of outsourced procurement services for mid-market financial services firms, including private equity, investment banks and hedge funds. We work with firms across the US and Western Europe.
We do this for four of the larger spend categories: market data, technology, travel and insurance. Our offering is what we call procurement-as-a-service, which consists of four key components.
First, our core procurement solutions, which includes group purchasing, preferred terms, and product and solution curation. Then there is our managed services offering, which reduces the administrative burden of contract and vendor management. We also have Concertiv Insights, which provides deep business intelligence, robust reporting and improved compliance. Finally, there’s our Concertiv360 platform – a procurement platform built specifically for the mid-market, which centralises all of the contract and vendor management to give clients a 360-degree view of their vendor portfolio.
TDD: What is the history of Concertiv and when did you become involved?
The original conception of Concertiv was the result of six investment bankers who came together and felt like they were spending too much money on travel. A small consortium was created to just do group purchasing for these six firms to help them with travel costs. The company continued for some period of time just in that mode but expanded into other areas like market data, technology and insurance. Over time, we raised series-A and series-B funding, and I joined the company as part of a series-B investment with an agenda to transform it into a bigger company.
Our vision for Concertiv is to streamline B2B purchasing and create a frictionless purchasing environment, both on the client side and the supplier side. This process has high resistance: the vendor landscape is constantly changing. Every pricing model is unique and sometimes legal counsel gets involved to negotiate a contract. Now, we shouldn't make pricing completely transparent. That's not in the best interest of the suppliers because they're trying to create unique value, but we can make the experience frictionless.
We aim to create a great experience both for clients and for suppliers in this purchasing space. That's our long-term goal. We want to do this not just in the US and Western Europe but around the world. We want to have a great portfolio of clients and suppliers who benefit from this frictionless purchasing environment while retaining their unique value proposition and their competitive edge.
TDD: What do you think is driving demand for outsourcing services in PE?
Mid-market CFOs and COOs are facing new challenges. Rising capital costs have prompted firms to revise their spending habits, focusing more on existing portfolio performance and driving a cost-savings agenda. Attention is now focused on spend allocation, budgeting and forecasting intelligence, leading to more precise and scrutinised budget forecasts.
But there are also other challenges – firm growth without proportional headcount increases, compounded by issues such as economic uncertainty, talent shortages, regulatory changes and cybersecurity threats. Administrative pain points use up valuable resources, making operational leverage crucial and driving firms to look towards outsourcing procurement.
The other area of concern for CFOs and COOs is the significant market opacity in their vendor spend. Given how integral services such as data and technology are to firms’ day-to- day operations, combined with the fact that most critical services run through a limited number of vendors who exercise pricing confidentiality agreements, most CFOs feel they have limited options.
TDD: How do you differentiate yourselves from competitors?
We're not a generalist procurement service provider. We are specialists. We only do what we do in our market space of PE firms, investment banks, hedge funds and other asset managers. We know exactly what their needs are and where they spend. The four areas we help our clients with are: travel, market data and research, technology and insurance. That's it. These are four very significant spend areas for the marketplace that we service and have deep domain expertise in.
A lot of our clients come to us with a cost-savings agenda, but stay with us for the administrative lift, the insights and the reduction of risk, as well as their ability to make better decisions.
There is no doubt that we can save our clients money, but it comes from a variety of both hard dollar and soft dollar savings.
For hard dollar savings, it comes from our group purchasing power and our industry insights that help ensure clients are paying the right price. Two other ways are cost avoidance and portfolio optimisation.
For soft dollar savings, it’s the administrative lift that comes from leveraging outside expertise that does the work for you without adding headcount. Examples include entitlements management, contract management, invoice management and reporting.
TDD: Are there easy wins for PE firms on improving with outsourced procurement?
I'll give you three areas. Number one, the cost of travel has gone up very significantly, while travel volume is still only at about 70% of what it was in 2019. The travel spend is way higher than it has ever been. So what's the opportunity here? Mid-market clients that we talk with do not have the buying power by themselves to get the discounts that we can procure for them. Many are not even aware of the programmes available to them and we can get them access to programmes that would be way beyond their reach if they were doing it on their own. Group purchasing is a huge opportunity that clients are not aware of.
A second opportunity is in vendor portfolio analysis and optimisation. There is vendor proliferation, with lots of new entrants in the marketplace. Over the past two years, there's been no control on spend. There was plenty of money available in the marketplace and people have procured a lot of new solutions and services. Companies are now asking: Which of these services are unique? Are there overlaps? Do I need all of these? What is my usage and is it aligned with my contracts? So, a lot of work has to be done to get their arms around all of these contracts, and finding the right vendors and services for their specific use cases.
A third critical area is cyber risk, which has escalated through the roof. Selecting the right cyber vendor, really understanding the risk, financially quantifying your risk areas and then managing your cyber spend is another huge area of risk and opportunity.