3 Surprising Ways the Procurement Technology Market Has Changed in the Past Year

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In the year since we launched our first SolutionMap, the procurement technology space has evolved considerably. Between product updates, the rise of new solution areas and increasing provider consolidation, the technology landscape is changing every day. Procurement professionals no doubt have found it harder than ever to keep track of which solutions offer what capabilities, which companies are still independent and which have become part of a suite, and what technologies they need know to stay ahead of the competition.

Just as the provider space is changing, so too has our approach. We have found new ways to evaluate and rank providers, and SolutionMap data has led us to create a diverse set of offerings that cover the full tech selection processes. So as we approach the second ever Q2 SolutionMap release next week, we wanted to offer readers a look back at the top lessons learned from our first year — and how we will incorporate those lessons into continued quarterly releases and new maps.

1. The Pace of Innovation is Accelerating

The pace at which solution providers are adding new features or improving old ones continues to accelerate. As we see the technology space continue to evolve, this has only reaffirmed for us that quarterly updates are essential to keeping SolutionMap current and relevant.

A research cycle of one year or longer fails to match the development of solutions; updates, new product releases and even acquisitions can be lost in the shuffle as the report heads to publication. Procurement indeed inhabits a cloud world at this point, and point-in-time evaluations quickly become outdated.

Vendors recognize the industry’s pace of innovation, too. Part of the reason we have seen such fast product improvements is because providers now realize regular software updates are essential to stay ahead of the competition.

Readers can see this reflected in how SolutionMap rankings change on a quarterly basis. No one provider stays in the exact same place, as customer and analyst scoring are continuously updated to reflect new data, and the overall benchmark for specific areas shifts each quarter, as well.

2. Functional Depth Has Become Increasingly Granular

Even with the granular depth we currently offer in our Provider Scoring Summaries, the past year has taught us that there are more requirements to unpack in analyzing solution providers. The more of these requirements we can define and comparatively evaluate, the better we can make recommendations to procurement organizations based on their specific needs.

AI is one example of an area that is becoming only more important. Within SolutionMap, we define and emphasize predictive analytics and machine learning as areas of emerging importance, and as more providers add these technologies to their offerings, we expect to add more detailed component definitions for evaluation.

In addition, this year we will likely add new requirements for capabilities we had previously not considered, or which are growing in importance. Capabilities once viewed as supplemental rather than necessary, such as global e-invoicing compliance specific to country-specific tax regulations, has become critical to procurement organizations.

3. M&A is Creating More Complexity

If there has been one trend outweighing the rest over the past year, it has been the push for consolidation within the procurement tech sector.

The list of recent acquisitions is long and impactful. Coupa’s string of acquisitions (e.g., Trade Extensions, Spend360, Simeno), Jaggaer’s purchase of BravoSolution and Ivalua’s acquisition of Directworks have reframed the market. WorkMarket was snapped up by ADP in a move making waves in the contingent workforce and services space (the full force of which will be recognizable in our upcoming Contingent Workforce & Services SolutionMap, available in Q3 2018), and Tradeshift’s merger with IBX presents another twist to the marketplace.

With these deals, we are seeing the push for many providers to build or add to an end-to-end suite. Each provider, however, is taking a different approach, whether through integrations/unification of the platform or replatforming onto one code base.

In many cases, we don’t yet fully understand how providers are approaching this process. Our analysts have previously observed that integration “is another challenge (and story) entirely when it comes to bridging business processes, data models, workflow and analytics across these solutions. And it points to the increasing value of suite providers building out more advanced capabilities in each of these areas — and also why partial modular capability within a suite may be of even greater business value (in select cases) than using a specialized provider that is functionally superior.”

In releasing our first Source-to-Pay SolutionMap earlier this year, we attempted to give practitioners an end-to-end, high-level suite evaluation to go along with the individual module rankings. The data will continue to shed light on the area.

Likewise, our P2P SolutionMap is celebrating its first birthday, and each quarterly release has brought new and valuable conclusions. To continue to help procurement organizations make better sense of this space amid increasing consolidation, we’ll be pushing providers to offer more information on their suite roadmaps, asking for diagrams and other systems and solutions architecture requirements to understand the nuances of the end-to-end solutions.

Looking Ahead

For practitioners making a tech selection, or those simply looking to understand the market, the long list of providers can seem daunting and complex. SolutionMap strives to help procurement keep with the pace of the industry, as well as evaluate the latest and greatest technologies and services. With the continued influx of data, we believe our understanding of the space will only deepen — and so shall yours.

The second ever Q2 SolutionMap release next week represents a milestone for both us and the companies included in the rankings. It serves as an opportunity to see how far we have come in the past year, and an exciting preview of what lies ahead.

What do you want to see improved or changed about the SolutionMap process? Any valuable lessons you have learned over the past year? Leave your comments below or reach out to the Spend Matters team directly.

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