Banks and Financial Institutions Want Their Slice of the Procure-to-Pay Market

Even though it will be culturally challenging for banks and financial institutions like JPMorgan Chase and American Express to build tight relationships with procurement organizations -- just look at their track record in the past -- some are making aggressive procure-to-pay investments. Perhaps the leader with the most interest in serving the procurement and global sourcing organization is JPMorgan Chase, which recently acquired Xign after picking up global trade services and software provider Vastera in the not-so-distant past. Supply and Demand Chain Executive has the full scoop on their pages, noting that JPMorgan Xign recently took "the wraps off its new Procure-to-Pay service, a global solution ... that combines JPMorgan's financial infrastructure, treasury services expertise and on-demand technology with the goal of helping businesses integrate existing enterprise supply chain and financial operations."

The story notes that JPMorgan Chase will be eating their own procurement dog food by being the "the first to deploy the Procure-to-Pay service" in its own global procurement and accounts payable organizations by the end of 2008. But I'm guessing that the ERP and best of breed technology providers don't have too much to worry about until we see a number of indicators that these financial institutions are getting any material traction outside of just the payments space (which is a natural fit, I'll admit). This is not a knock on any one financial institution, mind you, but rather an observation on the challenges of selling software and integrated solutions as a secondary competence.

American Express, for one, has been famous over the years for making investments in the sector, but has never been able to get much going with any sustained results from an end-to-end perspective. And from what I hear, things are looking worse than ever within Amex at the moment regarding an integrated procure-to-pay approach. Consider that the Harbour acquisition, while incredibly smart on paper, remains largely un-integrated, my sources tell me, and has in fact become even more of a silo in recent months. And this is not to mention the fact that Rion Needs, Amex's former SVP and head of Amex's S2S Purchasing Services, who was probably the one individual who could stitch everything together, is rumored to have left the firm.

Jason Busch

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