As our Spend Matters PRO analysis of procurement in the Middle East continues, we turn our attention to five additional areas that warrant understanding, investigation and consideration by any procurement organization (or individual) wanting to prioritize specific efforts and programs, or simply come up to speed quickly on the regional culture of procurement and supply chain including where it has been and where it is going. The prioritization of procurement activities is becoming more important across the Middle East, including the United Arab Emirates, Saudi Arabia and other countries. And it will become even more important as Iran — not exactly the Middle East by definition, however — is increasingly welcomed back to the international community. Indeed, the move to market economies, even in countries with strong legacies of ruling families and state control, is accelerating with the support of government. This is playing a role in helping organizations build cases for investing in procurement. As one local CPO recently remarked in conversation, in the past, “if you were the first one in the market in a given sector, you did well, as there was no competition.” But this is changing, as “low cost” is now becoming a differentiator for organizations as competition and market economies take shape across the Middle East.
For multinational organizations today — and for those expanding globally — creating the right procurement operating model, structure and culture for operations in the Middle East is critical. Using the right technologies is essential not only to leapfrog others but also to address specific business cultural nuances. As countries like the United Arab Emirates look to increasingly become global business and logistics hubs and the entire region looks to move past dependence on the energy sector in the coming decades, procurement will take on an increasingly strategic role (despite the fact far too many executives in the region continue to view procurement tactically). This multipart Spend Matters PRO analysis provides a primer on building and running an effective procurement organization in the Middle East and offers recommendations for procurement solution and services providers operating in or targeting the region. It is based, in part, on discussions with more than a dozen procurement executives and consultants based in the UAE. In the first installment of this series, we provide a snapshot of the state of procurement in the Middle East starting with a list of 10 observations. Further coverage will include a checklist for accelerating new or existing regional procurement programs and recommended solution vendors with on-the-ground presence (and customers) in the region.
Spend Matters has covered Basware’s acquisition of Verian in a series of research notes since the acquisition announcement on March 31, 2016. Our (free) coverage includes the following posts: Basware Acquires Verian, Expanding its Reach in U.S., Basware Acquires Verian – First Impressions and Basware Adquiere Verian Expandiendo su Alcance en EE.UU. PRO members can also read our subscription briefs: Basware Acquires Verian: First Take and Market Analysis and Verian-Basware Deal Analysis: North America Expansion, Solution Comparison and Integration Strategy. As we wrap up our initial coverage of the transaction in this brief, we provide competitor and customer/prospective customer analysis and implications for Spend Matters PRO members.
Basware announced Thursday it was acquiring Verian, a U.S.-based procure-to-pay (P2P) provider. Spend Matters broke the news and offered initial commentary a few hours after the transaction was announced. And later in the day, we published our first PRO briefing on the news, offering our initial analysis of the transaction and how it may impact the market. Given the fact we believe the transaction will disproportionately impact the North American market in relation to its relative low transaction value (approximately $35 million, according to Basware), the Spend Matters research team will provide additional targeted commentary in the coming days on the deal, especially surrounding its likely impact on customers, prospective customers and competitors. This PRO series includes our analysis of the transaction, provides summary background on the solution focus and capability of the providers and cuts through some of the marketing claims of the deal to get at what we believe really matters. In this installment, we explore Basware’s North America expansion strategy, provide insight on the key solution components (and differentiators) of each of the providers and tackle the unified versus loosely coupled suite question head on. In the final installment of this series publishing next week, we will provide detailed customer and competitor recommendations and analysis.
Earlier today, Basware announced it acquired Verian, a procure-to-pay (P2P) provider. Following the announcement, Basware shared with Spend Matters that the acquisition was done at an approximate 3.5X trailing revenue multiple. (Verian’s 2015 revenues were $10.5 million and the overall deal value was $35.9 million, according to Basware.) Given the deal terms and the immediate growth potential of the Verian business with increased distribution through Basware, Spend Matters believes the transaction will be accretive (i.e., adding value that exceeds the cost of the acquisition by improving revenue and earnings ratios) to Basware by 2017 (if not before). Basware also shared with Spend Matters that the deal is expected to close on April 1, 2016. This Spend Matters PRO analysis shares our initial impressions of the Verian acquisition and what it means for Basware, as well as provides preliminary market analysis. Additional PRO commentary, publishing in the coming days, will center on detailed customer and competitor analysis.
With apologies to Hollywood and those behind a recent Oscar winning film, E-Invoicing is a market undergoing radical transformation from both the inside (and) out. A combination of disruptive new technology models that go far beyond first generation supplier networks and evolving market and customer requirements (and expectations) are in the early process of taking a sleepy accounts payable-centric solution area and putting it front and center as an enabler of broader procurement, finance, supply chain and IT strategies. Spend Matters research and analysis based on interviews with a variety of solution providers, practitioners and consultants indicates the largest visible changes will take shape in the years ahead. This multipart Spend Matters PRO brief provides an e-invoicing outlook and forecast for 2016-2018. Included in this series are 10 technology and mega trends, a market forecast and sizing analysis, market growth and adoption scenarios and a look at the evolving competitive landscape and vendor shortlists, including how e-invoicing will increasingly intersect with supplier networks, invoice discounting, transactional analytics (procurement, A/P, payments), statement/invoice audit recovery and related market segments. For organizations looking to get started with the e-invoicing basics – or accelerate program adoption – we recommend starting with the PRO series E-Invoicing: What it Takes to Get to World Class (see Part 1 and Part 2).
Tradeshift Partners with Baiwang: Becoming the E-Invoicing and Compliance Engine for Chinese VAT and Business Connectivity?
Tradeshift announced Tuesday a partnership with Baiwang, a Chinese provider of tax-related services and one of the two government-approved companies to provide tax control hardware and software to implement China value-added tax (VAT) reform. This shift represents an important transition from business tax (BT) to VAT in China, which means the country will increasingly be aligned to international tax practices and is likely to further facilitate cross-border trade with greater transparency than before.
I’ve been giving a lot of though of late to the notion that procurement agility will nearly always mean different things to different organizations. But generally speaking, I’d argue that agile procurement functions bring five common capabilities or markers that are difficult to debate. If you’re interested in learning more about the topic of procurement maturity and how it relates to creating greater agility in procurement (and the business overall), do check out Reframing Maturity Models: Empirical Perspectives on Radically Improving Procurement Performance.
The ISM and Spend Matters Global Procurement Tech Summit (#ProcureTech2016) is a wrap. Despite the hurdles in marketing an event at the same time as Ariba LIVE (not by design!) and with less than seven months from finalizing the idea through to executing it, nearly 300 people took a chance to attend the first-time event. While the perfectionists in us would have liked to tweak a number of things, the event was, based on the feedback we received from participants, a smashing success. And next year will be even better.
Most companies attempting a benchmarking effort consider questions around areas such as savings measurement, transactional compliance, procurement value contribution to the business, purchase order or invoice approval cycle time and the like. Many of these types of metrics are timeless and remain valuable. But taken alone, they often fail to capture how procurement’s overall contribution to the business is changing.
Earlier this morning at #ProcureTech2016, Professor Robert Handfield, of the Poole College of Management, North Carolina State University, gave a must-attend talk on rethinking the future of procurement technology by putting data first — and how to ensure you’ve got the right set of information at the core of sourcing, supply chain and supplier engagement activities.
DuPont’s Craig Reed, a supply chain and procurement executive running direct spend across all of DuPont, gave a nuanced, engaging and insider talk this morning at #ProcureTech2016. Craig also shared an important secret, which I’ll let you in on here. Besides ERP/MRP, supply chain planning, collaborative logistics optimization, P2P, e-sourcing and many other systems of record and systems of stakeholder and supplier engagement, DuPont leverages Microsoft SharePoint as a key piece of technology infrastructure that weaves together knowledge across the organization as well.