Top Posts of Fall 2018: Market Consolidation, Conference Season and Intensifying Trade Tensions

Procurement

As students went back to school and businesses shook off the haze of a sultry summer, the procurement world kicked off fall with bang. Leaving little time to reorient after Labor Day, we saw major acquisitions in several sectors of the procurement software market, along with new insights from the fall conference circuit and continuing developments in the tense global trade environment.

Take some time this Thanksgiving weekend to catch up on our most-read coverage from Fall 2018 and prepare for the end of the year with the latest news and research on Spend Matters PRO and SolutionMap Insider.

M&A Consolidation Continues

The Spend Matters team’s predictions saw a big win with one projection: that M&A consolidation within the procurement software market would continue to accelerate throughout 2018.

We’ve seen multiple examples of that playing out since January, with a lot of action in September, October and November.

Coupa made two big moves, starting right over Labor Day weekend with its acquisition of DCR Workforce. By purchasing the technology components of DCR, a vendor management system, Coupa aimed to augment the capabilities of its Services Maestro offering, which provides foundational capability to manage SOW services. In October, Coupa scooped up Aquiire, an e-procurement provider with patented real-time search capabilities, adding to its lead in catalog search and front-end shopping usability.

Farther along in the n-step purchasing cycle, the CLM market saw some major movement when Apttus was acquired by private equity firm Thoma Bravo. Apttus has had a lot of ups and downs over recent months, and what was once an intriguing set of technological capabilities has taken the back burner to other more pressing corporate issues. Still, the potential for buy-side (and even enterprise-wide) CLM competitiveness remains at Apttus, as Spend Matters Chief Research Officer Pierre Mitchell explained, and the company’s new private equity owners could even consider spinning off those components into a proper enterprise CLM product in its own right.

Finally, the beginning of the holiday season started not with a slowdown but yet more news on the acquisition front. As we reported Friday, Basware announced that it had received a takeover offer. The potential suitor turned out to be Tradeshift, according to a Bloomberg report Monday, and we set out to explain five key reasons why the two companies may be pursuing a tie up. We’ll be staying on top of the latest developments as they emerge. In the meantime, check out Wednesday’s related coverage, which pits Basware and Tradeshift head to head in the invoice-to-pay evaluation ring, illustrating where each provider has relative strengths and how a combined entity would fare against the broader market.

New Perspectives from the Fall Conference Circuit

Rather than jet off to exotic locales for relaxing vacations, procurement professionals this fall found themselves traveling to an array of conferences. Spend Matters was on the ground at events across the country over the last several months, and readers have been keen to learn about the latest thought leadership and industry developments that have come out of these events.

In September, we returned to Silicon Valley for the second annual Cognitive Sourcing Summit, hosted by LevaData, where we learned about how adopting artificial intelligence-based software requires preparing to use advanced capabilities today. Later in the month we explored a Big Idea — that sustainability and profitability can co-exist in procurement functions — during Procurious’ second annual event in Chicago, and Andrew Karpie, research director for labor and services procurement at Spend Matters, caught up with another big 2018 acquisition — ADP’s purchase of WorkMarket — during ADP’s analyst day.

In October, Taulia took on the red-hot topic of working capital improvement, explaining its vision for unleashing the $14 trillion in annual spend volume trapped within supply chains.

We also got a blast from the past at Tradeshift’s analyst day, where we learned about the provider’s plans to revive the B2B marketplace concept.

Trade Tensions in Focus

Beyond M&A activity, the other recurring theme of 2018 has come down to one word: trade.

The Trump administration’s second year in office brought a slew of tariffs across industries and talk of a full-blown trade war with China. The implications for procurement organizations are major, to be sure, but Spend Matters has stayed on top of these developments with the latest news coverage and recommended mitigation strategies.

One major shift: The North American Free Trade Agreement (NAFTA) met its end, being replaced with the U.S.-Mexico-Canada Agreement (USMCA). Procurement professionals welcomed the new pact, as it ultimately it removed longstanding uncertainty from their planning processes, Spend Matters Editor JP Morris reported.

“Glad it's done — now what does it look like and how to optimize our bottom line and mitigate any ongoing risk,” said Greg Schlegel, founder of the Supply Chain Risk Consortium.

For advice on how to handle the ongoing tariff disputes between the U.S. and China, Spend Matters has two guides on the subject.

At a September gathering of commodities buyers and experts in Grand Rapids, Spend Matters’ Taras Berezowksy reported several first steps for organizations to take on tariff mitigation, including tariff code analyses, performing a Pareto analysis on part spend, and exploring alternate country sourcing options. Berezowksy also previewed a price forecast for the chemicals and metals markets, both of which are expected to see higher average prices in 2019 compared with previous years.

Then, as the Trump administration’s Section 301 tariffs were being finalized, we teamed up with Resilinc to provide a guide for how procurement organizations can proactively mitigate risks from tariff disputes. Much of the difficulty comes from poor visibility of multi-tier supply chains, as well as a lack of data that can be mapped to potential business decisions in the event of a disruption. But the key takeaway from all of this is simple: Start planning for trade risks today. Only then can procurement and supply chain organizations take the actions necessary when the time comes to protect their businesses from unforeseen losses.

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