Why we acquired a company that specializes in spend analytics

Pieter Riedstra, a partner in our Product Development and Procurement Practice, knows what you may be thinking. “It’s true,” he says with a smile. “Spend analytics is traditionally seen as a relatively dull activity in the value chain.”

But the technology’s role, and that of the entire procurement function, is changing quickly. As consumers demand virtual, customized, and sustainable products and services against a rapidly shifting economic backdrop, organizations are looking for insights that can help them capture more value in procurement, and even position the function as a source of competitive advantage.

A new approach to digital procurement--Spend Intelligence by McKinsey

A new approach to digital procurement—Orpheus, a McKinsey company

In early February 2020, we announced the acquisition of Orpheus GmbH, a leading provider of spend-analytics technology and a recognized innovator in digital procurement. We have now launched Orpheus, a McKinsey company, a new service that combines Orpheus’ advanced platform technology with McKinsey’s industry expertise and content-rich services in digital procurement.

According to those closest to the acquisition, the new offering will help revolutionize certain aspects of the procurement process and give organizations a new way to create value.

“We’re changing how organizations optimize procurement,” says Bill Wiseman, a senior partner in McKinsey’s Operations Practice. “The new combination of McKinsey expertise and insights with a world-class technology platform is unique in the industry.”

According to Bill, we’re also changing the way we deliver that service. We’ve created a software-as-a-service (SaaS) offering that lets clients choose from a palette of options in creating a unique solution that suits their specific requirements. Whether it’s a building a one-off spend cube based on software licensing, or launching a full-service engagement incorporating spend-data processing, actionable insight services, and program management, the hybrid model allows clients to choose the exact level of service they need.

“That flexibility,” Bill adds, “will allow a much broader range of organizations to access our benchmarking information—an exciting shift for both us and our clients.”

The new offering also frees up capacity to focus on what matters most. “We’re going to be able to spend more time with clients on ideation, driving change, and actually delivering impact, while offering faster and better data analysis,” says Bjorn Uwe-Mercker, a partner in our Operations Practice. “And that will free up clients’ time to pursue other value-added activities. While we take care of the analytics and insight generation, users will be able to bring the human element to the fore and focus on negotiation and implementation, rather than crunching numbers.”

We’re changing how organizations optimize procurement. The new combination of McKinsey expertise and insights with a world-class technology platform is unique in the industry.

Bill Wiseman, senior partner

Orpheus’ CEO Jörg Dittrich and COO Michael Lauer were instrumental in making the acquisition a reality. They saw that the combination of our consultants’ expertise and Orpheus’s market-leading software could help create the future of digital procurement. “We couldn’t be more excited to be working together to make that future a reality,” says Jörg.

As Pieter points out, that reality will be anything but dull. “We’re redefining a complex, underestimated, and undervalued discipline of procurement excellence,” he says, “and transforming spend analytics into an exciting and high-value activity.”

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