CascadeWorks First to Enable Enterprise Spend Management for Complex Services with Launch of Clarity 4.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 30, 2002

Breakthrough Capabilities for Complex Services and Contract

Compliance Deliver Savings for 5-10 Times More Spend

Than First Generation Niche Services Solutions

CascadeWorks, the leader in pioneering Services Supplier Relationship Management, today announced the release of CascadeWorks Clarity 4, its fourth generation Supplier Relationship Management (SRM) platform for services. With this release, CascadeWorks further extends its leadership in services SRM, the inter-enterprise collaborative software that enables companies to deliver 10-20% cost savings across a broad range of services spend such as facilities, staffing, corporate services, training, and marketing. CascadeWorks Clarity 4 introduces two breakthrough features that are new to the industry, support for complex services and integrated contract compliance, enabling Fortune 1000 companies to drive savings across 5-10 times more spend than simple workforce and project services solutions. This release also introduces Clarity in either a hosted or installed software model, providing companies the ability to deploy and manage their own supplier networks as the platform becomes a strategic component of their IT infrastructure.

The release of CascadeWorks Clarity 4 comes amid several studies focusing on enterprise services spend and effective supplier relationship management for services. Recent research, shows that Fortune 1000 companies spend a significant portion of their annual purchasing dollars on services -- from 30% to 70% depending on industry. The same study conducted by Denali Consulting cited savings ranges of 10-29% from strategic sourcing and e-procurement of services, which is substantially higher than the 17% average for most initiatives focused upon goods. In an era when outsourcing of services continues to grow 15% annually, according to the 2001 Annual Outsourcing Index from The Outsourcing Institute, better management of services spend provides a compelling opportunity for significant bottom line savings.

"The data increasingly verify that services spend is of strategic importance to any executive who cares about cost containment and effective allocation of resources across the enterprise," said Dennis Stradford, CEO of CascadeWorks. "With the release of CascadeWorks Clarity 4, businesses now have a solution that can reduce services costs 10-20% enterprise-wide, resulting in greater savings and more rapid return than piecemeal approaches that address only one department or one type of service."

Complex Services - Services are not solely people.

Already the first to manage multiple services, CascadeWorks Clarity 4 again takes SRM to the next level by introducing support for complex services, which combine time-, project- and fee-based metrics. A service contract for machinery installation, for example, typically involves a variety of discrete services, each measured and evaluated in different ways. Installation workers are paid by the hour, with different pay rates and overtime for foremen, welders, mechanics and general laborers. Project inspectors may be paid per inspection, with different rates for the type of work inspected plus reimbursement for expenses such as mileage and cell phone charges. Equipment rentals are charged at actual and stand-by rates plus mark-up. CascadeWorks Clarity 4 is the only platform available today that can manage requisition, agreements, tracking, change orders and payment for the many combinations of time-, project- and fee-based services required by the Fortune 1000. The aggregate of these complex services -- which range from construction to facilities to training to specialty services like pipeline maintenance -- typically command 5-10 times more spend than simple service categories like temporary staffing.

"Virtually every Fortune 1000 company purchases a wide range of outsourced services, from simple time-based services like temporary staffing to highly complex services where the opportunity for cost containment is even greater," said Tom Cook, Director, Enterprise Applications, Hurwitz Group. "With leading corporations taking an increasingly comprehensive approach to cost reduction, the Hurwitz Group projects significant growth in the market for technologies like CascadeWorks Clarity that manage the full spectrum of services purchasing and supplier relationships across multiple categories of services spend."

Integrated Contract Compliance - Achieving the savings

With this release, CascadeWorks Clarity 4 also links contract compliance with services procurement and supplier management, responding to market requirements from leading corporations that increasingly demand that the initial savings delivered by sourcing is enforced by a transactional purchasing infrastructure. The new contract compliance features in CascadeWorks Clarity 4 prevent "expense creep" from eating away at sourcing savings by ensuring compliance at several levels.

First, CascadeWorks Clarity captures the master service agreements between the enterprise and its suppliers, which set the overall terms of the relationship including service types, rates and payment policies. As each subsequent requisition runs through Clarity, the system not only enforces the use of certain suppliers through ranking (preferred, approved, etc) as established in the sourcing program, but also verifies that the terms for the services requested comply with the master service contracts. Clarity also provides sophisticated controls for rates, fixed, variable and limited fees, combined with the flexibility to incorporate bidding in the proposal process to further increase savings. The platform conducts the same kind of verification for each service invoice, providing a closed-loop solution that not only ensures invoicing and payment accuracy, but also provides line item level visibility to drive continuous sourcing improvements.

"Services spend, which is value driven and difficult to compare through price alone, has received little attention in corporate cost savings initiatives to date, but is now emerging as one of the most productive target areas for broadly based savings programs," said Dawn Tiura, Partner, Denali Consulting. Having helped companies source more than $30 billion in materials and services, Denali is finding that sourcing initiatives focused on a range of services can deliver as much as 10% greater savings than traditionally sourced commodities. In addition, linking the sourcing efforts to a technology platform such as CascadeWorks that ensures each and every service agreement complies with the terms secured by sourcing initiatives is key to capturing the projected savings.

A Choice Of Enterprise Deployment Models

With the management of services spend rapidly emerging as a critical corporate-wide focus, corporate IT organizations have asked that Clarity be made available as enterprise-class installed software on par with the other strategic application platforms of the company. CascadeWorks Clarity 4 offers companies the option of selecting either a hosted model or installed software version -- or the opportunity to move from a hosted to installed model as enterprise needs grow.

About CascadeWorks

CascadeWorks is the leader in pioneering Services Supplier Relationship Management, an inter-enterprise software platform that enables collaboration between buyers and suppliers across the full life cycle of purchasing and management of supplier relationships, designed specifically for the unique needs of services. With services spend typically accounting for over half of all corporate purchasing expenditures, CascadeWorks' flagship product, CascadeWorks(TM) Clarity enables companies to achieve 10-20% cost savings across a broad range of services spend including facilities, staffing, corporate services, training, and marketing services. CascadeWorks Clarity is currently in use at industry-leading companies such as ABN AMRO NA, Charles Schwab & Co. and Texas Instruments, and was selected by Ariba to power Ariba(R) Workforce(TM). Based in San Francisco, CascadeWorks is a privately held company with venture capital from New Enterprise Associates (NEA) and Kennet Capital Limited, Broadview's early stage venture affiliate. For more information visit www.cascadeworks.com.

Note to Editors: CascadeWorks and the CascadeWorks logo are trademarks of CascadeWorks. All other company and product names and may be trademarks of their respective owners and are acknowledged.