Catching Up with a Marketing Maven and Talking Vertical Procurement Solutions

AdobeStock/Melpomene

Earlier today, Spend Matters PRO launched a research series (see: A Guidebook to the Rise of Industry-Specific Procurement Technologies: Related Markets, the Why and the Where) exploring the rise of industry-specific solutions for procurement technology.

The series was in part inspired by a May briefing with Jaggaer (as well as Ivalua and SAP Ariba earlier in the year). Jaggaer recently announced its move to build industry-specific solutions in “manufacturing, logistics, healthcare, retail, CPG and life sciences/pharma” — building on its current vertically-targeted offerings in higher education and life sciences materials management.

Last week, I had the chance to sit down with Jaggaer’s Steve Lundin at our office in Chicago, to talk verticalization in regards to procurement solutions. As Steve said, “I've been dabbling around the supply chain space for years, and know that software companies have dipped their toes in industry specific waters, but primarily outside of developing targeted products. What's happening now, with industry specific vertical procurement solutions, reflects what we've seen in the consumer market: with B2C being the tail that wags a B2B dog. As consumer (or industry) demands mature, the software that enables business will be forced to cater to ever more sophisticated and nuanced needs. For example, the days of bringing your car to the corner garage for everything have been eclipsed by a higher level of technology that demands discrete equipment, which of course is only found at the dealership (or uber specialized corner garages that serve lattes!). The net result of this trend will be a growing demand within verticals for their own specific spend solutions that manage different industry pain points."

Lundin is Jaggaer’s CMO and someone who I almost crossed paths with 14 years ago. We figured out that we were both at an event at UIC to "rebrand" the notorious Ron May, Chicago's version of Matt Drudge (believe me, if you’re from Chicago, you remember this man) after the turn of the millennium. May described Lundin in an essay as having a "breezy, Jack Kennedy-esque style."

I remember May slightly differently, as a polarizing figure that spoke as the anti-cheerleader for a struggling Chicago tech scene. Regardless, fast forward over a decade and Steve got pulled into procurement and we reconnected. He’s a man who has clever opinions about many things and a wizard with words and ideas. Steve’s also a renaissance guy — as you might have guessed from his own writings if you Google him — and a real character to boot (check out his book!)

But I digress. Since the product pieces are still left to fill in from the verticalization announcement, Steve and I had some constructive debate over whether Jaggaer is in a poll position (or not) to capitalize on the industry specific approach — and what parts of source-to-pay suites will most lend themselves most to being tailored for industry specific requirements.

Five themes that came out of our discussion stuck in my mind:

  1. Certain customer segments are starting to ask for verticalization. This is demand-driven even if procurement is not describing it as such.
  2. Analytics front-ends and dashboards are a good place to start, but they are insufficient along. You must get into workflow, business rules, master data and the rest of the application plumbing to truly verticalize.
  3. Cloud-driven configuration should make “mass customized” solutions easier to pull off.
  4. There are different consultants and experts who will lend vertical expertise to procurement technology vs. generalized solutions. Take manufacturing. PwC could be a name we begin to see more frequently given the strength of their team here and its linkages to supply chain (e.g., PRTM legacy)
  5. Generic procurement technology solutions will be a harder sale once verticalization takes off — especially if industry-based solutions not only come “pre-configured” but also “fully loaded” with KPIs, benchmarks, supplier/market intelligence and more.

What do you think? What are Steve and I missing in this brainstorm?

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.