SAI Global - On sale again? (2017)

[Timothy1]

Read the following article on SAI Global:

Baring Private Equity Restarts Sale of SAI Assurance - Bloomberg

Wonder what is happening with this organization Seems to be on market way too often.

Since some of my consulting clients are with this CB & happy with their auditors and also I too conduct some contract audits for this CB, wish I have some insights. what makes this organization on sale too often

If you have any insights please feel free to share

 

[Sidney Vianna]

Seems to be on market way too often.

The previous sale was for the whole SAI group. Now, according to the article you hyperlinked, the divestiture is for the Assurance group only, the one that controls the management system certification business.

The indicated valuation of the organization to be divested is very large in the sector, so, only a handful of global CB organizations could even consider such acquisition.

Overall, to me, this indicates that the current owners don't believe the assurance group is representing an acceptable financial return. As someone who's been in (or close to) this sector for almost 3 decades, the contagious commoditization mind-set that took over the sector is the main culprit of the downward spiral.

The management system certification business was developed to provide assurance and confidence; unfortunately, people just want "certificates" and, that, being so, it is very hard to differentiate oneself from the competition that offers a cheaper certificate.

Until this sector understands what their product should be and fight the fights necessary to restore trust in it's ability to deliver assurance/confidence, it will be a struggle for most professionals involved.

 

[Timothy1]

Based on my personal experience, the number of companies getting certified based on its merits are limited. Most get certified mainly because of customer pressure/ some other pressures (corporate etc)

 

[Golfman25]

That's because certification is useless. What has value is the system and how it operates. We are what, 20+ years in. Many systems are mature -- its the same old, same old. We pay consultants and the like to make our systems better -- they can consult. All the CB can do is give us a piece of paper that gives everyone a warm fuzzy.

 

[AndyN]

The previous sale was for the whole SAI group. Now, according to the article you hyperlinked, the divestiture is for the Assurance group only, the one that controls the management system certification business.

The indicated valuation of the organization to be divested is very large in the sector, so, only a handful of global CB organizations could even consider such acquisition.

Overall, to me, this indicates that the current owners don't believe the assurance group is representing an acceptable financial return. As someone who's been in (or close to) this sector for almost 3 decades, the contagious commoditization mind-set that took over the sector is the main culprit of the downward spiral.

The management system certification business was developed to provide assurance and confidence; unfortunately, people just want "certificates" and, that, being so, it is very hard to differentiate oneself from the competition that offers a cheaper certificate.

Until this sector understands what their product should be and fight the fights necessary to restore trust in it's ability to deliver assurance/confidence, it will be a struggle for most professionals involved.

I have a slightly different take (from the inside - my company was acquired by them). SAI was late to the USA "ISO party". Being "big" in Australia, which they were, doesn't translate to the USA. They acquired a number of businesses and, without recognizing the power of the brand in the US market, they stamped SAI on everything. Excel Partnership's healthy business dried up. SAI did that with a couple of registrars too. Using a training arm to generate business is a well established technique but when the brand isn't recognized who's going to use it? When you have no-one to develop materials, how can you continue? That part has fallen right off and with no brand recognition for the CB side (plus other issues no-doubt) it's likely to fail.

 

[Sidney Vianna]

unfortunately, people just want "certificates"

That's because certification is useless.

Thanks for making my point.

 

[Timothy1]

I have a slightly different take (from the inside - my company was acquired by them). SAI was late to the USA "ISO party". Being "big" in Australia, which they were, doesn't translate to the USA. They acquired a number of businesses and, without recognizing the power of the brand in the US market, they stamped SAI on everything. Excel Partnership's healthy business dried up. SAI did that with a couple of registrars too. Using a training arm to generate business is a well established technique but when the brand isn't recognized who's going to use it? When you have no-one to develop materials, how can you continue? That part has fallen right off and with no brand recognition for the CB side (plus other issues no-doubt) it's likely to fail.

Thanks for your inputs. I have worked with other CBs- European as well as American - I do not see much difference in the quality of audits. Lot depends on individual auditors. Some write NCs on petty things with literally no value to the customer. Customers have to waste time not only fixing these trivial issues, need to identify root causes and address them through corrective actions. One such auditor moved from CB to CB, moved up the ladder in the process in the same European and American CB were I worked.

 

[AndyN]

Based on my personal experience, the number of companies getting certified based on its merits are limited. Most get certified mainly because of customer pressure/ some other pressures (corporate etc)

Yes. If you look back over history, being ISO 9001 compliant was a customer contractual obligation. Since 3rd party certification took over, the idea was (supposed to be) that in selecting suppliers, having an ISO certificate meant that customers didn't have to do supplier development which is costly. I, for one, came from the supply chain. I didn't have time/money to spend with suppliers who, for example, couldn't spell c.a.l.i.b.r.a.t.i.o.n, so I used suppliers who were at least ISO 9001 compliant/registered as there's at least some modicum of understanding. At least, that's the theory. Sadly, even today, I've discovered yet another CB auditor who doesn't understand such basic "blocking and tackling"...

 

[Golfman25]

You can't truly achieve real competence via certification. It just gives people a warm fuzzy and something to show for "supplier development." We all know what a good supplier and a bad supplier looks like regardless of the certification. Those that work to do a good job don't get much out of certification. They are usually steps ahead of the auditor.