It’s not every day that a tech analyst gets to South Carolina (except those focused on agricultural yield improvements or manufacturing). But last week, after a meeting in Charlotte, North Carolina, I had the chance to drive down to Verian’s headquarters (for the first time) to meet with the management team. It was time well invested, and I found an interesting metaphor while making the trip through back roads and farmland to Verian’s modern headquarters – still considered to be in the Charlotte metro area – across from a defense contractor, but pretty much in what used to be a cornfield a few years ago. Specifically, Verian has taken its own path just about as far away from typical convention as possible for a high-flyer P2P start-up. Despite having commendable SaaS growth (more on the numbers as we begin our analysis), they’ve basically done everything in complete opposition to Coupa, despite competing in very similar markets. In this Spend Matters PRO analysis, Managing Director Jason Busch provides an update on Verian, including what types of procurement and AP organizations should shortlist this provider, as well as the back roads they have to building out capability that continues to delight and surprise in a manner as impressive – but truly different – than Coupa.
Verian: Beyond the P2P Basics
In a few years, Verian will be celebrating its 20-year anniversary (for background on Verian’s solutions, see our past coverage: here and here). But the company could not be more different today in product scope and scale than when it was founded in 1997 (but it has maintained a loyal following among employees and customers). Verian shared with Spend Matters that its business had grown 22 percent between 2013 and 2014. SaaS revenue grew 26 percent over the same period for the provider, which focuses on companies with between $100 million and $5 billion in revenue (that’s right – they’ll go down deep into the middle market, targeting companies with at least $10 million or more in indirect spending). A company of this size could expect to pay $50,000 per year to Verian (including all configuration and deployment services) over a three- to five-year agreement for basic key elements of the suite.
In the last fiscal year, the company added 25 new customers to its roster. And they did this all with a team of only four quota carrying account executives. Contrast this with most high-growth start-ups with a sales presence roughly 10 times (or more) Verian’s size, and the growth becomes even more impressive. Recurring revenue will represent 66 percent of Verian’s business this year and 72 percent next year.
Verian has just shy of 100 employees today (with 80 percent in the U.S. and a small team in India). This team develops, sells and services a SaaS P2P suite with surprising depth across the eProcurement, e-invoicing, AP automation, asset management and inventory management areas. For a significant number of customers, Verian supports a number of industry specific processes that begin to look more like ERP extensions than indirect procurement (but more on this later). Sector wise, Verian’s focus remains on industrial services including oil and gas, retail/hospitality, financial services, healthcare and government/not for profit.
Ideal customers, in Verian’s experience, are those with “complex and diversified” indirect spending. Customers may also need inventory and asset management capability (fully integrated with P2P) that goes beyond the simple basics, but is not necessarily as deep as highly specialized tools. From a psychographic perspective, customers tend to be both price and time sensitive – they want a relative bargain and they want solutions deployed quickly. But they’re also after solving complex problems. In other words, the more sophisticated the specialized requirements, the more likely they are to gravitate to Verian.
Verian has invested significant time in developing an implementation methodology that allows them to implement their solution in 90 days or less. This includes getting applications configured (and running), on-boarding users and suppliers, loading catalog content, configuring forms as well as limited invoice routing/approvals. The limits of the approach are that its own resources limit Verian today. But Verian is looking to gain additional scale by building on existing relationships and rolling out a range of implementation and channel partners both domestically and globally in the next year.
Extending P2P for Real World Use Cases
Verian’s customers often use it to support a number of highly specific industry and company requirements. One example Verian shared with Spend Matters centers on asset/facility maintenance from a customer service perspective. These types of requests are common in hospitality, retail and banking (and span facilities maintenance, asset tracking and IT servicing). In this case example, imagine an asset in a facility (e.g., computer, television, machinery, etc.) needs repair. An employee submits a purchase request and then the manager approves the request.
A regional coordinator then uses a labor calendar to schedule local technicians and the technician then inspects the item in question. Following this field report, a manager reviews the asset warranty, approves parts, transfers the PO to a warehouse and the warehouse ships the parts. To enable this use case, P2P processes must be fully integrated with service requirements and tracking (i.e., the items purchased are linked with a work order for repair and must be tracked together). And all of this activity is captured on the asset record as well.
Verian, of course, supports many other industry specific use cases bridging P2P, asset and inventory management (which we’ll explore further as our analysis continues).
Are Verian’s Solutions a Good P2P Fit For Your Organization?
If you check the box on more than a handful of the following points, then we would strongly suggest putting Verian on your P2P shortlist:
- Small or medium-sized organization with between $10 million and $300 million in annual indirect spending (or higher)
- Comfortable in working with a procurement solutions provider without the same stature as larger name vendors (e.g., ERPs, Coupa)
- Desire a combination of price and capability (value)
- Looking for relatively strong e-invoicing and AP automation capability out of the box
- Desire CD-like customization capability in a P2P SaaS solution or looking to replace a CD solution with SaaS capability (without giving up the flexibility previously enjoyed through installed customization)
- Looking to enable highly specific industry or company specific P2P use cases
- Interested in partially or fully embracing mobile P2P use cases
- Comfortable trading off a lack of strong native “upstream” capability including spend analytics (that requires classification), e-sourcing, supplier management, contract management, etc., for a best-of-breed transactionally-oriented and systems-centric P2P suite
- Placing a greater emphasis on the overall P2P suite (and depth) rather than on just the buying interface (e.g., search, shopping and comparisons). Note, Verian has improved materially in these areas in recent years but the depth and capability of the broader suite is what shines above the crowd, rather than the interface and user experience alone, which keeps it in the running with peers.
As our analysis of Verian continues, we will turn our attention to some of the highlights of Verian’s latest release as well as additional industry-specific P2P scenarios the provider has built its reputation on enabling. We will also provide a more direct comparison to Coupa for organizations debating between the merits of these providers that have taken two very different paths in tackling P2P.