Sterling Eats Up Front-End Functionality

Sterling Commerce, the provider of multienterprise collaboration solutions, has announced an agreement to acquire Comergent Techologies. The acquisition, settled at $155 million, will bring together Comergent's order capture and configuration technology with Sterling's order completion functionality to create an end-to-end order fulfillment supply chain solution. The acquisition will enable Sterling to market solutions for complex distributed supply chains and will help the company reach out to other verticals as well. "It's not enough to manage the increasingly complex supply chain. That only addresses part of the problem," says Scott Pulsipher, vice president of product management at Sterling. "The other part of the problem is how do you present a single face to the customer, how can they get the right components of products and services offered, how can we present accurate pricing and configuration?" Pulsipher sees the acquisition as an answer to this question. Comergent, as a developer of e-business software, has Web-based order capture, catalogue management, item management, pricing, and configuration solutions. This functionality represents the front-end piece that Sterling--which focuses on order fulfillment, sourcing, scheduling, and managing of orders--is missing. Sterling plans to integrate Comergent's eBusiness Application Suite into its multi-channel order fulfillment software to broaden its footprint in the order hub space. Additionally, Comergent will introduce more manufacturing customers to Sterling's consumer base, which is currently largely in the retail and distribution verticals. Pulsipher says that the acquisition speaks to a growing desire in the marketplace for end-to-end solutions. Consumers now wish to purchase in one channel, but have their fulfillment occur in another, he claims. A complete order fulfillment solution makes it easier for a company to facilitate online purchase and in store pick up, for example. Ray Wang, principal analyst at Forrester Research, sees other vendors moving in this direction as well. "End-to-end order hubs are coming together," Wang says, noting that many vendors are looking to acquire this functionality, while others, such as SAP and Oracle, will build it themselves. "Web services and SOA makes this possible," he says. Wang believes that the acquisition is a smart move for Sterling in terms of both functionality and product direction. "It shows that they're still committed in the order hub applications space. For some time people weren't sure of their strategy. This says that they're in the order hub space for good." Related articles: Business Process Wheels Need a Strong Hub The 2005 Service Elite Awards Re:Tooling Business Problem: A sales force is overwhelmed with the complexity of its company's products and service offerings. Tech Solution: guided selling tools.