A HYPER-GROWTH PHASE FOR THE HOSPITALITY PROCURE-TO-PAY (P2P) DEFACTO STANDARD
02
EXPLOSIVE GROWTH: NEW INNOVATIONS, NEW GEOGRAPHIES, NEW INDUSTRIES WRITTEN BY
HARRY MENEAR
PRODUCED BY
ARRON RAMPLING
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BIRCHSTREET SYSTEMS
STEVE MARKLE, CEO OF BIRCHSTREET SYSTEMS, DISCUSSES THE NEW INDUSTRIES, NEW GEOGRAPHIES AND NEW, INNOVATIVE PRODUCTS DRIVING THE NEXT PHASE OF GROWTH FOR THE COMPANY
O
ver the past 17 years, BirchStreet Systems has emerged as the leading provider of Procure-to-Pay (P2P) solutions for
enterprises operating in the hospitality space. P2P is comprised of solutions which automate procurement, accounts payable, invoice & payment 04
processing, inventory management, recipe management and capital expense management. These solutions can deliver up to 20%-50% back office and food and beverage cost reduction, and achieve over 80% on-contract spend compliance rates, improving rebate capture. With best-ofbreed solutions and strong value proposition, BirchStreet is poised to enter its next phase of expansion. “We’re really entering into a hypergrowth phase,” says CEO Steve Markle. BirchStreet counts such premium hotel brands as Marriott, Hilton, Hyatt, Accor, and Four Seasons among the enterprise-wide users of its suite of SaaS on-demand solutions. Markle continues, “having captured most of the major global hotel brands, and a large percentage of the large hotel management companies as enterprise customers,
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BirchStreet is preparing to scale its operations dramatically. We grew in excess of 40% in the last year and can see that growth trajectory continuing for the foreseeable future as we deploy into our customers’ property portfolios, grow alongside our rapidly expanding customer base and acquire additional large enterprise customers. Moreover, we have our sights on growing the company by many multiples in the next few years.� Following two years as BirchStreet COO, Markle, has served as CEO of BirchStreet since July 2018. w w w.bi rc hst re e tsyste m s . com
BIRCHSTREET SYSTEMS
“ W E HAVE GROWN 40+% IN THE LAST YEAR AND HAVE AMBITIONS TO GROW THE COMPANY FIVE TIMES IN THE NEXT FIVE YEARS” — Steve Markle, CEO, BirchStreet Systems
rapidly expanding its footprint in new geographies through its existing customer base of global brands and an enhanced international selling organization. “Our third growth vector is the new suite of products we have recently developed for our in our roadmap, which is really exciting,” he continues. “These solutions go way beyond traditional e-procurement.” These three elements of BirchStreet’s transformation and growth journey are best illustrated by one of the company’s newest clients, Wynn Resorts. “Working closely with Wynn
06 In our sit-down session, Markle
over the past year, we are quickly
outlines an ambitious plan to match
approaching their goal of becoming
the company’s bold, dramatic growth
truly paperless,” says Markle. “Having
targets, sharing his vision for Birch-
recently gone fully live on BirchStreet,
Street’s continuing transformation
Wynn is not only automating its P2P
into a diverse and disruptive global
processes, but is also utilizing nearly
organization.
every tool that we have to eliminate
“There are three major vectors of
paper. Like we did by working with the
growth that put BirchStreet into
leaders in the hotel space in our early
context,” explains Markle. “First, we
years, Wynn has partnered with us as
are more deeply penetrating our
an early adopter to create state-of-the-
traditional hospitality industries, as
art solutions for the gaming industry.
well as entering new industries that
Innovation through collaboration has
are similar because of the adjacent
been the hallmark of BirchStreet’s
direct-goods spend categories that
development from our earliest days as
they share.” Second, BirchStreet is
a transformative company”, he explains.
CLICK TO WATCH : ‘BIRCHSTREET CUSTOMER CONFERENCE 2018 HIGHLIGHT FILM’ 07
BirchStreet to further its penetration
BETTER SERVING LONG-TIME CUSTOMERS
of the hotel and hospitality vertical.
Over the past 17 years, BirchStreet
Furthermore, it demonstrates that
has continuously sharpened its ability
BirchStreet is making a decisive
to increase spend visibility & control
entrance into the gaming, restaurant,
and operational efficiency to signifi-
managed foodservice and sports
cantly cut costs for its clients in the
& entertainment events spaces,
hotel space. This singular focus on
evidenced by customers such as Levy
reducing the cost of procuring from
Restaurants and Delaware North.
and settling with their suppliers has
The company is also launching a host
resulted in BirchStreet capturing the
of new products in order to smooth
14,000 businesses that it now claims
and improve the operating processes
as its customers. BirchStreet’s
of a world-leading institutional food
importance was cited by AccorHotels
service brand.
CPO Sebastien Brunel in a recent
This new partnership is allowing
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BIRCHSTREET SYSTEMS
CLICK TO WATCH : ‘BIRCHSTEET OVERVIEW’ 10 interview with Business Chief. “Birch-
US$150mn of annual spend through
Street brings structure to our process.
the BirchStreet platform.”
We have PO approval process, PO
Elaborating further on the value
management, inventory management,
that BirchStreet brings to its customers,
product management and (electronic)
Markle says, “There are two big
interaction between (our) hotels and
sources of economic value that
(their) suppliers. This is essential for
BirchStreet brings to these organiza-
AccorHotels, especially in North
tions besides increased efficiency.
America,” he explained. “We have been
The first big driver is spend control
partnered with BirchStreet for 10
which enables big savings by allowing
years; they’ve always supported us in
their operations to go through a
everything we’ve done and the
controlled online buying experience
platform brings efficiency, good
that ensures the properties are buying
savings and automatic updates to
the right goods, from the right supplier,
inventory – we probably do around
at the right price.” Second is the
prevention of risks like maverick or
they earn. Given annual spend size of
off-contract buying, and third, Birch-
our large enterprise customers, rebates
Street’s platform creates value for its
and allowances add up to big dollars.
customers on the revenue side. “You
Our value proposition is amplified when
can increase revenue with us by having
our solution is coupled with a Group
tight and efficient controls over your
Purchasing Organization (GPO) like
inventories so that you never miss an
the one offered by our key partners at
opportunity to make a sale,” Markle
Hilton Supply Management” (HSM),
explains. “Suppliers offer rebates and
says Markle. “With HSM, BirchStreet
allowances if you achieve certain spend
can approach customers in any of their
levels with them. Our system automati-
target industries or geographies with
cally tracks all of the spend with each
a seamlessly integrated offering
supplier so that the customer can easily
combining P2P technology and
capture the rebates and allowances
supply chain programs” 11
E XE CU T I VE PRO FI LE
Steve Markle, CEO Steve brings over 20 years of technology and business leadership. His responsibilities include driving the strategy and execution of the company. In addition to Markle’s role at BirchStreet, he will continue as an Independent Director on the Board of MarginPoint, a leading Inventory Management SaaS company. Prior to BirchStreet, he was Vice President and General Manager, CLM and SRM for Apttus, the category-defining Quote-to-Cash software provider. Markle was founder and CEO of BuildBeam, job management software designed specifically for specialty trade contractors (acquired by DaftLabs). From 2001 until 2013, Steve was an executive at Ariba (acquired by SAP), a pioneer in Sourcing, Procurement and Business Network space where he ultimately served as Vice President of Solutions Management. Markle earned his BSE in Mechanical and Aerospace Engineering from Princeton University.
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BIRCHSTREET SYSTEMS
NEW PRODUCTS A specific example of how BirchStreet is better serving its existing customer base, while also aggressively expanding into new markets, is the adoption of innovative new products that greatly enhance the efficiency of its customers’ operations. According to Markle, from its earliest days BirchStreet’s focus on the P2P function within the hospitality industry has defined the development of its software platform. “We recognized early on that the large ERP software companies are excellent 12
$25mn+ Approximate revenue
2002
Year founded
300
Approximate number of employees
at meeting generic enterprise management software system needs. But with its emphasis on food & beverage and other items consumed in delivering its ‘product’, or what we
200,000+ Registered Users
call ‘direct goods’, hospitality has very specific needs that were not being met. There are numerous “pain points” in the P2P process that are specific to hospitality and BirchStreet is uniquely positioned to address those needs. We integrate with all the major ERP systems thereby completing the full ERP functionality required by our large enterprise customers”. “Two years ago, we acquired AccuBar, a best-in-class, specialist
Processing
25mn
Purchase Orders a year
solution provider, for businesses that handle beverage inventory,” says Markle. Since acquiring AccuBar, BirchStreet has combined both companies’ capabilities to create a single inventory management solution for food and beverage organizations. “It’s very slick,” Markle says. “It has mobile capabilities that allow you to receive goods with your mobile device when it reaches your dock. This is a critical part of the process that enables flow-through automation from receipt to pay. In addition to promoting accuracy in the receiving process, it saves a huge amount of time versus writing things down by hand and then entering data into your accounting system.” Another example is BirchStreet’s investment in infrastructure for global scale. All of BirchStreet’s customer transactional data runs on Oracle databases. By leveraging Oracle’s technology, BirchStreet is able to host more than 2mn logins per month while maintaining a 99.9% uptime. BirchStreet also embeds Softlinx services to send over 50,000 fax pages per month on behalf of its customers to the corners of the globe without internet. By switching to w w w.bi rc hst re e tsyste m s . com
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“ W E’RE SAVING OUR CLIENTS SO MUCH MONEY BY ENABLING THEM TO GO THROUGH A TIGHTLY MANAGED ONLINE BUYING EXPERIENCE” — Steve Markle, CEO, BirchStreet Systems
mobile device,” Markle elaborates. “Our mobile app will recognize the shape of the bottle and branding and allows you to take inventory, including partial bottle inventory by moving the fill-line on the bottle image that automatically appears on your mobile screen. Think of the more expensive scotches, or a bottle of Remy Martin Louis XIII Cognac and you quickly understand the power of this quick, easy and accurate inventory management tool. You potentially have a lot of capital locked up in beverage inventory, particularly when you consider
Softlinx in late 2017, BirchStreet
the final selling price per pour.”
increased its worldwide success rate
Expanding further on this proprietary
by 20%. And through BirchStreet’s
technology, Markle continues: “Once
partnership with CapGemini, the pair
you have the contour of the bottle
offers Accounts Payable as a Service
saved to the system – and some
(ApaaS) to joint customers such as
weirdly shaped bottles are hard to
FourSeasons. ApaaS is a fully standard-
calculate by eye – our patented
ized and automated business process
technology always recognises the
for end-to-end invoice process.
shape of the bottle. All you do is swipe
In addition to automating the goods
your finger where the liquid line is and
receiving process, BirchStreet
it’ll automatically calculate how much
provides its customers with a patented
volume you have.” Markle maintains
specialized inventory function. “The
that BirchStreet’s inventory software
service’s unmatched take-inventory
has the potential to revolutionize
capabilities allow you to grab a bottle
waste mitigation in high-value bever-
of liquor and wave it in front of your
age management. w w w.bi rc hst re e tsyste m s . com
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BIRCHSTREET SYSTEMS
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Responding to the needs of its
restaurants manage recipes and
institutional food services clients, the
ingredients, as well as food costs,
company is also introducing innovative
which is the Holy Grail for business
software to help its food production
owners and chefs. Then, if you
operations track stock and ensure
combine recipes with inventory, our
standards of service across multi-lo-
solution will implement automatic
cation operations. “For managed food
stock replenishment notifications or
service companies, we’re also
fulfilment of that inventory item
introducing our recipe and production
depending on the recipes you produce.
kitchen modules,” says Markle. “Think
Just think of the labor savings from
about how many recipes a large casino
automating that aspect of food
or hotel must have and the process of
services operations. If you think about
making and distributing finished goods
a high-end casino property, you think
to their outlets. Our solution helps
of shops on the first floor where
where it also hopes to attract a new roster of clients. “We’re making a very large bet on Europe, the Middle East and Asia,” says Markle. “By all indications it will be wildly successful. There are lots of companies within both our old and new industries that operate outside BirchStreet’s traditional market of North America.” As BirchStreet breaks into new sectors and brings new offerings to new and old customers, Markle reflects on his own schedule. “I’m traveling around the world three or four times a year,” he says. “I’m about to do an around the world trip, starting in early March. I’ll just keep going East until I wind up they’re selling a wide range of items.
back in California.” Markle holds town
Working with our customers has
halls with employees in every Birch-
allowed us to create a retail inventory
Street office to keep the company
extension of our inventory module
engaged and updated on the next
functionality,” says Markle.
stages of its development. “Change is constant, and you manage change
NEW MARKETS, NEW REGIONS
by making sure your organization
BirchStreet’s new suite of products
knows where it’s going and embraces
are allowing the company to aggres-
the enthusiasm of its leaders.”
sively penetrate adjacent or nearby
On the subject of BirchStreet’s
industries. Furthermore, its deeper
legacy as well as his own, Markle
penetration into the multi-national
muses: “We look at our industry of
hotel management sector is allowing
hospitality as we would any business
the company to explore new regions,
that provides a ‘product’. Our customers w w w.bi rc hst re e tsyste m s . com
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End-to-End End-to-End End-to-End YOUR ONE-STOP PROCUREMENT PARTNER YOUR ONE-STOP PROCUREMENT PARTNER Hilton Supply Management works with over 2,000 suppliers to manage YOUR ONE-STOP the entire supply chain from farm to Hilton Supply Management works PROCUREMENT PARTNER restaurant, manufacturer room and with over 2,000 suppliers toto manage
project to completion. We the entireinception supply chain from farm to provide sourcing for 8,000 properties restaurant, manufacturer to room and Hilton Supply Management works (including more than 1,800 non-Hilton project inception to completion. We with over 2,000 suppliers to manage hotels) leveraging massive economies provide sourcing 8,000 properties the entire supplyfor chain from farm to of scale, competitive contracts with (including more than 1,800 non-Hilton restaurant, manufacturer to room and top suppliers and substantial savings hotels) economies projectleveraging inception massive to completion. We for hotels. of scale, competitive contracts with provide sourcing for 8,000 properties top suppliers andthan substantial savings (including more 1,800 non-Hilton To learn more about joining the Hilton for hotels. hotels) leveraging massive economies procurement program please contact of scale, competitive contracts with us at HSM@Hilton.com. To learn more about joining thesavings Hilton top suppliers and substantial procurement for hotels. program please contact us at HSM@Hilton.com. To learn more about joining the Hilton Prototype Custom Operating procurement program please contact Décor Procurement Supplies Packages us at HSM@Hilton.com. Custom Procurement
Custom Procurement
© 2018 Hilton
© 2018 Hilton
© 2018 Hilton
Prototype Décor Packages
Prototype Décor Packages
Operating Supplies Operating Supplies
PA R T N E R S
BirchStreet and Hilton Supply Management (HSM) partner to offer integrated P2P SaaS technology with supply chain programs. HSM’s programs can save up to 61% depending on the commodity purchased and BirchStreet’s technology enforces purchasing compliance to ensure that value is captured.
All of BirchStreet’s customer transactional data run on Oracle databases. Oracle is the leading database software manufacture and handles which lets us handle more than 5,000 per second. By leveraging Oracle’s technology BirchStreet is able to host more than 2 million logins per month while maintaining a 99.9% uptime.
19 BirchStreet and Capgemini have partnered to offer Accounts Payable as a Service (APaaS), a solution offering a centralized mailroom function, process standardization, all integrated using Optical Character Recognition (OCR) for invoice capture with BirchStreet P2P as the underlying technology platform. These two leaders in hospitality, joined hands to create customer value through these shared services and help clients like FourSeasons realize savings up to 40-50% in operating costs and rapid profitable growth.
BirchStreet uses Softlinx services to send over 50,000 fax pages per month on behalf of our customers. By switching to Softlinx BirchStreet increased our worldwide success rate by 20% while cutting costs by 10%.
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BIRCHSTREET SYSTEMS
are enterprises that manage multiple facilities that deliver a wide spectrum of services that make up their ‘product’. The hospitality ‘product’ is effectively made up of parts and labor. We partner with our customers in multiple ways to significantly reduce their labor costs and increase sales. We do this through automating a whole host of manual processes from procuring to paying for the goods they use at their property’s day in and day out, and we provide the tools needed to better manage the ‘parts’ used in 20
their food and beverage operations, as well as in the rest of the customer experience. In the end, that is what hospitality is all about: the experience. We wake up every day asking ourselves, ‘what can we do to help our customers deliver the best experience possible at their properties’. By virtue of what we do, we help our customers to take a fresh look at themselves and evaluate whether their processes and internal capabilities fit their vision for where they want to go as an organization. Our approach is not to be prescriptive, but rather to work closely with our customers and innovate together.”
“ O UR SERVICE HAS CAPABILITIES THAT ARE UNMATCHED IN THE INDUSTRY” — Steve Markle, CEO, BirchStreet Systems
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Markle concludes: “What we do is
excited about what the future has in
not just about deploying our software;
store for us as we innovate with our
it’s about working with our customers
customers to transform the worldwide
to provide the tools and expertise they
hospitality industry.”
need to deliver their desired outcomes: the very best experience to their customers, while using technology to minimize the costs of delivering their product. We could not be more proud of what we have achieved over the past 15 years and couldn’t be more w w w.bi rc hst re e tsyste m s . com
BirchStreet Systems 1301 Dove Street, Suite 300 Newport Beach, California 92660 T +1 949-567-7000 www.birchstreetsystems.com