Zycus Horizon: A History Lesson Before Exploring the Zycus Vision

Earlier this morning, Aatish Dedhia, Zycus founder and CEO, took the main stage at Horizon to discuss Zycus’s procurement suite vision. While Zycus’s core proposition continues to remain squarely focused on procurement – and everyone in the audience at Horizon that I’ve said hello to so far comes from procurement – Zycus has also emphasized the move to “financial savings management” as an additional, and central, component of the Zycus source-to-pay suite. Aatish noted that the broader Zycus suite also now includes spend analysis, e-sourcing, supplier management, contract management, and purchase-to-pay (P2P).

As an example of future direction in the financing savings area, later in the presentation Aatish shared a prototype of a budget forecasting capability that the team is building that leverages statistical regression analysis along with external factors (e.g., inflation) to help procurement and finance teams creating spending budgets. Fascinating stuff (and more on it later). But before Aatish got into his firm’s product vision, he gave a brief history lesson about the procurement technology sector from a procurement perspective.

In the early days of procurement technology between 1998-2000, Aatish argued that vendors were just getting started in highly granular areas. The time between 2000-2005 continued to see the rise of individual functional components and the early days of non-ERP suites. From 2005-2010, Aatish noted, there were individual market leaders in the space at the time but each of these providers tended to excel in one area versus many (even if they had suites). Individual focus included e-sourcing, contract management, P2P, etc.

The big change in recent years since 2010 has been the move to integrated suites. In Aatish’s words, there has been an evolution to buying a single integrated solution (either upstream or downstream, in his words). Today, approximately 40% of the RFPs in North America that Zycus participates in are for multiple suite components in a single solution. Looking ahead, Zycus believes that between 2015-2020 organizations will move to getting the entire sourcing and P2P suite (inclusive of all areas) from a single vendor.

Why? Aatish argued that history tells us that a single suite model will emerge in part because of the rise of “feature parity” across solutions. In addition, pricing pressure will help drive “suite affordability.” But perhaps most importantly, “the third reason for a movement to a single suite is that the value of an integrated approach in such areas as common master data, data flow integration, and analytics” is quite powerful.

And where does this leave Zycus? Aatish suggests that with recent acquisitions (including the “big ERP acquisition last year”) there is a void in the market for a top provider to fill from a suite perspective. Customers are looking for “alternatives and Zycus wants to work very hard to filling the void.”

As our coverage of Zycus Horizon continues today, we’ll explore what elements Zycus plans to emphasize as it continues down its suite vision, including some of the rather nifty analytical and master data components that Aatish demonstrated on stage during his talk. Stay tuned!

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