Zycus Horizon: Expanding the Suite in Spend Analysis, Sourcing, and P2P (Part 1)

Yesterday morning at Horizon, Zycus' customer conference in New Orleans, Zycus CEO and founder Aatish Dedhia spent 30 minutes describing his vision for the company. A sizeable crowd (roughly 200) sat and listened. Many of those we spoke to are current Zycus spend analysis (iAnalyze) customers and potentially customers of the broader suite vision including purchase-to-pay (P2P) that Aatish described in his talk. In a series of posts looking at this vision on Spend Matters and Spend Matters PRO (and how far Zycus must go to achieve it) we'll first report what we learned at the event and then provide a detailed analysis about where Zycus is heading and how the execution of their strategy will impact customers, prospects, competitors and partners.

Aatish noted that Zycus' mission is to become the "top globe procurement software suite alternative to ERP providers," Earlier this year, we featured a series on Spend Matters titled Zycus -- Building Up the Solutions Arsenal Behind the Scenes (read Part 1, Part 2, Part 3, Part 4 and Part 5). Zycus is going to move forward with a "software focused" vision that will not confuse the broader services opportunity with cloud-based software. In his words, "we will not get into BPO or sourcing services – Zycus is very focused on providing procurement software (any and all software related to the function)."

Zycus is focused aggressively on organic expansion and, in Aatish' words, "not getting acquired." The company has been cash flow positive for the past ten years with profits continually invested in R&D and new product development. Zycus has increased the size of its R&D team from 40 in 2008 to 170 in 2012. Spend Matters research suggest this puts Zycus around the top five providers in the sector for product engineering-related headcount in procurement today.

In recent quarters, Zycus' products have spanned the sourcing and supplier management continuum, covering just about every area except P2P (e.g., spend analysis, sourcing, contract management, supplier management, financial savings management). Within this set of target areas, Zycus has tried to avoid become what Aatish describes as a "pseudo suite." A "pseudo suite" by his definition would include various modular assets with varying degrees of functional depth and integration. In contrast, an integrated suite vision includes depth as well as "seamless integration across multiple modules."

From a technical perspective, Aatish outlined three themes he sees Zycus differentiating and competing on outside of the specific product capability: mobility, integration and comprehensive P2P capability (including eProcurement, supplier self-service/network and e-invoicing). In terms of innovation, he noted that Zycus has filed 13 patents in the last 18 months, suggesting these cover a range of areas including:

  • Artificial Intelligence (AI) based guided buying
  • Advanced savings management
  • Context based searching of electronic catalog database
  • Authoring external contact documents
  • Real time categorization
  • Cost component analysis

While much of the innovation driving the thinking that went into these patent applications undoubtedly came from Zycus' earlier spend data classification related experience, the company's product expansion is increasingly coming from new areas. Aatish shared, in response to an audience question, that 35-40% of Zycus' revenues are coming from new products. Among the most exciting of these given their the increased competition it will bring to the market is P2P – an area Zycus spoke quite a bit about at the event (and which we'll explore in the next installment of this series later this week).

If you're sitting on spend pins and needles until we pick up this series tomorrow, here's a quick preview of what Zycus P2P will ultimately include (an early release version is available for customers in a pilot program right now):

  • eProcurement (including: auto-matching, e-invoicing, payment approval, discounting)
  • Zycus supplier network (including: flip PO to invoice, track payment, acknowledge order, notify dispatch)
  • e-invoicing (approval, requisition, order, receipt, catalog, etc.)

Zycus noted at Horizon that key design tenants for their P2P capability include usability (drag and drop capability, Web 2.0 UI), auto-flip capability (requisition to PO and PO to invoice), auto-matching and, perhaps most interesting, truly "guided buying." Stay tuned as we investigate Zycus P2P in more detail and provide our cursory analysis of where the broader Zycus suite is headed.

- Jason Busch

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