In my February 24th post Getting the facts from SciQuest is Like Waiting for Guffman, I shared with you both my efforts and challenges in obtaining clarification from SciQuest regarding their press release in which they announced that “The company added 17 new customers during the quarter.”
Generally speaking, I am not a big fan of press releases because they are usually long on self-serving rhetoric, and short on any meaningful information. However, news emanating from SciQuest has always been suspect for a variety of reasons, especially involving claims of new client wins. You simply have to refer back to my June 11th, 2014 post Why press releases should have a “shelf life” or how SciQuest has taken the practice to a new low, to understand upon what my position is based. In other words, what SciQuest considers to be new clients are likley, for the rest of us, something entirely different.
That said I did, on March 2nd, finally receive a response from SciQuest’s Marketing Specialist, Public Relations & Analyst Relations person, Roberta Patterson.
Here is what she wrote:
“We are subject to non-disclosure agreements with many of our customers that prevent us citing their name publicly. We can, however, tell you that we added the following organizations in the fourth quarter which were highlighted in our most recent investor call: Baylor University, Enable Midstream Partners, the county of Milwaukee, Refresco Group, Safeway and the University of Arkansas for Medical Sciences.
When we are able to mention customers by name, we will continue to do so through press releases, blog posts, and investor calls.
With regards to 13G filings, for the firms that are required to file these forms with the SEC, they are normal course filings and affect most public companies. The company whose form you referenced had recently increased their ownership of SciQuest.”
Okay, this is new information which is great, as it provides some additional insight. But it also raises questions.
For example, is the University of Arkansas for Medical Sciences really a “new” account?
According to my research, Many institutions use software created by SciQuest to manage their purchasing. Sometimes it’s branded with a different name. For example, at UCSF and Berkeley it’s called “BearBuy”, at Case Western it’s called “SmartCart”, and at Yale it’s just called “SciQuest”.
Interesting.
I think that it is important to mention at this point that when, in a subsequent e-mail, I specifically asked Roberta if the new clients that she named – including the University of Arkansas for Medical Sciences – are “expansions, extensions and renewals from existing clients or are they new client wins,” her response was a succinct “New client wins.”
The thing is that RazorBuy, according to the University of Arkansas website, was developed by the U of A in partnership with SciQuest, to implement an e-Business based marketplace and improve the business processes for the University. Besides being used to “create Requisitions and Purchase Orders,” RazorBuy will empower the U of A community with the knowledge to make informed decisions with enhanced reporting capabilities.
Based upon further research, The University of Arkansas for Medical Sciences is part of the University of Arkansas System. Maybe I am missing something here, but given that a cursory search clearly shows that the RazorBuy system goes back to at least 2012 if not longer, what exactly does new mean? Especially when Roberta was given the option of classifying the University of Arkansas for Medical Sciences contract as either an expansion, extension or renewal of an existing client relationship.
The same can be said for Baylor University.
According to an April 9th, 2008 SupplyChain Brain article titled SciQuest, Provista Form Procurement Partnership in Education, Healthcare and Research Arena, “SciQuest procurement and supplier enablement solutions also serve many leading research-centric organizations, pharmaceutical companies, biotechnology firms and healthcare organizations, including Baylor College of Medicine.”
Further research shows that Baylor University acquired the medical school, which became known as the Baylor College of Medicine in 1903, and that even though “the Baylor College of Medicine became technically independent from Baylor University” in 1969, “the two institutions still maintain strong links,” with Baylor electing “around 25 percent of the medical school’s regents.” The two institutions also share academic links and combine in research efforts.” This too raises the question . . . is this really a new account or an expansion and/or extension of an existing relationship?
I am certain that these decisions were not made in a vacuum nor without some degree of dialogue between associated institutions. Why not just say, the Arkansas and Baylor deals are an extension of our existing relationships within those University communities?
There is a pattern here that goes back to my June 11th, 2014 post. At least within the higher ed market.
This last point is worth noting because – and to be fair to the company – the other new non higher-ed contract wins are clearly that, as demonstrated by the following Milwaukee County Office blog post; 2015 Budget E-Procurement Initiative.
At the end of the day why does this matter? Why would I expend any time writing about this? Whether new, an expansion or a renewal, does it really matter. After all it’s business!?
With a cursory look, maybe. But once again, and here is the thing . . . why, as they did in the June 2014 press release, would SciQuest with this current press release, say that these higher ed clients are new?
Pure speculation on my part at this point . . . I want to make that clear, but I can’t help but think that SciQuest might be losing ground in higher ed. Something is up. Especially given my November 26th, 2014 post SciQuest “Sales” Execution Troubles?, and the subsequent call I received the next day from the company’s investment banking firm about which I wrote Call from investment banking firm regarding SciQuest post telling.
By the way, and referencing my August 26th, 2014 post Is Duke ready to make a move away from SciQuest?, while SciQuest is still in there as the marketplace provider, with a contract roll-over for another 2-3 years, both the university and the hospital system are now a customer of ScoutRFP.
What is worth noting is that when you visit the ScoutRFP site, there isn’t yet a press release announcing the Duke win. Perhaps this is the difference between being a publicly traded company with a stock price and Wall Street pressures to worry about, as opposed to a company that simply has to focus on serving the best interests of the customer.
This brings us back to the bigger question regarding our industry, that extends well beyond SciQuest . . . Are investment bankers and Wall Street bad for business?
Direction changes into new markets can’t be easy for a publicly traded company
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Procurement Insights 
piblogger
March 7, 2015
Interesting update . . . wanting to be fair, I spoke with a vendor regarding today’s post and asked the following:
If your company landed the same accounts under the same circumstances as SciQuest would you consider them new?
Here is the response:
Good question. “If I were in SciQuest’s position and the numbers are important to provide a perception to the shareholders, then yes. If it were our company, we probably wouldn’t call them “new”, especially if its just more users using the same tool like with RazorBuy.”
This leads back to the same issue with which I closed the post . . . Are investment bankers and Wall Street bad for business (https://procureinsights.wordpress.com/2014/11/29/are-investment-bankers-and-wall-street-bad-for-business-by-jon-hansen/)?