Author Archives: Pierre Mitchell



About Pierre Mitchell

Pierre leads Spend Matters procurement research activities and has broader solution development responsibilities for intellectual property creation and firm strategy as Managing Director of Azul Partners. This includes spearheading efforts to build new types of interactive and social communities of interest within the procurement profession including overseeing the evolution of spendmattersnet.com, Spend Matters PRO, MetalMiner, and other digital assets within Azul Partner’s umbrella. Pierre has 25 years of procurement and supply chain industry and consulting experience, and is a recognized procurement expert specializing in supply processes, practices, metrics, and enabling tools and services. He is a regular contributor to business publications, a frequent presenter at industry events around the world, and counts himself fortunate to have served and interacted with so many CPOs and future CPOs. Prior to his positions in research and advisory, he led numerous operations and systems transformations at Fortune 500 organizations. Industry positions include manufacturing project manager at The Timberland Company, materials manager at Krupp Companies and engineer at EG&G Torque Systems. He holds an engineering degree from Southern Methodist University and an MBA from the University of Chicago. In the early 2000's, Pierre was the first supply chain practitioner to become a procurement "industry analyst" as the VP of supply management research at AMR Research (now part of the Gartner Group) where he provided trusted counsel to procurement executives, business leadership, IT, and the solution providers who serve them. Most recently, he was the head of procurement research and adjunct business advisor at The Hackett Group, where he helped expand Hackett's procurement benchmarks and research studies while growing the Procurement Executive Advisory Program into a gold standard membership-based procurement advisory service in the market today.


Ivalua: Vendor Snapshot (Part 7) — Competitive and Summary Analysis

contingent workforce

So how does Ivalua — previously the Rodney Dangerfield of e-procurement for getting no respect, but now is no laughing matter to its competitors — stack up to the market? In this seven-part PRO overview, Spend Matters has covered Ivalua’s history, internal capabilities, strengths and weaknesses. But to see how it fits into the marketplace, first we have to understand who it is up against. Namely:

* Full Source-to-Pay Suites, including SAP Ariba, Coupa, GEP, Jaggaer, Zycus, Corcentric/Determine, Synertrade, and even Oracle and a few others (e.g,. Wax Digital)
* Full P2P Suites, including Basware, BuyerQuest, Oracle, Vroozi and others
* End-to-End and Best-of-Breed “upstream” Sourcing and Strategic Procurement Technology (SPT) Offerings, including Allocation Network, Bonfire, EC Sourcing, Keelvar, MarketDojo, Scanmarket, * ScoutRFP and more
* e-Invoicing and e-Payment Specialists, including Proactis, Taulia, Tipalti, Transcepta, Tradeshift, Tungsten and others
* Supplier and Master Data Management (MDM) Providers, including Apex Analytix, Aravo, ConnXus, HICX, Procurence, Tealbook and others that don’t slot neatly into the supply management area within SPT.

We'll start by providing a more detailed overview of Ivalua's biggest competitors, namely SAP Ariba, Coupa, GEP and Jaggaer, before covering the rest of the S2P providers that it may encounter in potential deals.

Ivalua: Vendor Snapshot (Part 6) — Commentary & SWOT

As we noted in Part 1 of this seven-part Spend Matters PRO series, Ivalua is no longer the Rodney Dangerfield of procurement suites, and we no longer need to apologize to the late comic. Since we last assessed Ivalua in-depth in 2016, the provider has achieved a lot of respect from the analyst community, the investment community (with a “unicorn” valuation exceeding $1 billion in their last funding last round), and most importantly, the customer community as evidenced by Ivalua’s 98% customer retention rate — even though Ivalua’s customer satisfaction scores have slipped slightly in its last SolutionMap rankings.

However, the firm’s larger peers still often seem quick to dismiss this “newcomer” to the S2P arena, even though Ivalua was founded in 2000! As a perceived newcomer in the North American marketplace, with a smaller customer count, less revenue and less perceived history, it still is often not even known, or well known, to some practitioners that we’ve run across who’ve not research the market deeply. This is despite the fact they Ivalua has:
* almost as large of a global presence (with offices across the Americas, EMEA and APAC)
* a track record of supporting a global customer base
* a valuation that smaller S2P players might sell their workforce into indentured servitude for
* a platform that is simultaneously so broad and so deep that it's becoming difficult for many of their peers to compete on out-of-the-box functionality, especially in the direct materials/sourcing space, in larger clients with extensive requirement lists.

As we noted in late 2016, “if we add up the differentiated combination of its architecture/platform, industry enablement, functional/modular capability (across the source-to-pay continuum), analytics and ‘overlay’ process support capabilities, the sum of the Ivalua package stands out from all others in a true ‘deadpan’ way — albeit with no laughing involved.”

When you augment this with leading direct sourcing support (with the re-platforming of its DirectWorks acquisition), improved workflow management, UI improvements, one-search, improved (direct) catalog management and bot-assisted guided buying, you get a platform that's a force to be reckoned with.

In short, Ivalua deserves much more regard from its peers than it has received to date, as it's well positioned to make a big dent in the global marketplace that will be hard not to take notice of. That said, some parts of the application suite can be improved (as we discussed in Part 5), there is a lot of unexpected capability under the hood around bill of material management (in a centralized module that allows for deep what-if scenario analysis), asset and tooling management, program and project management, third-party data integration and scorecard creation, accruals, and global tax compliance management. Plus, the cost breakdown analytics, NPI (new product introduction), corrective action capability, extended supplier profile management, and the ability to pull data into and push data out of the environment on a daily (or even hourly) basis is deeper than one might expect, especially with the large number of pre-configured interfaces out-of-the-box and the ability to acquire more through the add-on store.

And while Ivalua is still not perfect (but to be honest, no provider is), as it's still missing a few capabilities that we feel are becoming core with S2P (and even its updated UI is not industry-leading), we still believe that anyone who invests the time to get to know the solution on a product level will come away very impressed if they have the same technology-and-capability-centric proclivities as the Spend Matters team (even if it's not the right "fit" for the organization at the end of the day).

So, without further adieu, in this penultimate installment of our updated Spend Matters snapshot on Ivalua, we provide you with an objective SWOT analysis of the company, and a selection shortlist to help companies decide whether Ivalua should be in their crosshairs, whether they have their sights set on a platform, suite or modular capability.

Tomorrow, in Part 7 we’ll finish up with a competitive market segmentation, a comparative analysis and some final thoughts. We also include recommended short-list candidates as alternative vendors and offer some provider selection guidance.

Commercial Value Management (Part 3): Critical Commercial Use Cases to Align Extended CLM with the Enterprise

change of control clauses

In our last installment of this CVM series, we highlighted a graphical framework to depict how commercial value management is about extending CLM into a more commercially enabling role in all enterprise areas where contracts (and value promises) are stored.

In this next installment of this series, we’ll highlight these areas and how to unlock some of that value for the benefit of the firm — and procurement.

Let’s briefly look at some of these areas to see how extending contract management to broader CVM approach is a practical way for procurement to get aligned with other areas (and with itself).

Ivalua: Vendor Snapshot (Part 5) — Product Weaknesses

global trade

If you've already read Part 1 of our updated vendor snapshot on Ivalua (which includes a detailed company and solution overview), then you know that you're either going to be attracted to the depth, breadth and configurability of the solution — or perhaps overwhelmed by it if you're new to the advanced sourcing and procurement game. But, even with its prowess in deep configurability, Ivalua's solution is not without its weaknesses. In this Part 5 of our seven-part vendor snapshot, we are going to dive deep into Ivalua's product weaknesses, providing facts and expert analysis to help a procurement organization decide whether they should shortlist the vendor. And an organization that is putting Ivalua head-to-head with a provider like Coupa should compare and contrast what we say here versus what we say in Part 2 of our Coupa vendor snapshot because near-equal scores in Spend Matters Solution Map does not imply near equal capability in all areas, and definitely not in the areas that might matter to your organization the most. Ivalua's weaknesses are similar to our last review a couple of years ago, but a few weaknesses have been addressed since last time (and while not as deep, but still exist against either suite-peers or best-of-breed), and the re-platforming of DirectWorks in particular has gone a long way to address specialized support around direct sourcing.

Ivalua: Vendor Snapshot (Part 4) — Product Strengths

Global Risk Management Solutions

Anything Ivalua still lacks in global brand and market awareness along with sales/marketing infrastructure and prowess, it makes up for by delivering a source-to-pay platform designed to emphasize functional depth, suite-based capabilities and industry-specific enablement scenarios in the private and public sector. Ivalua delivers a no-compromise set of capabilities and an underlying platform that is most likely to appeal to procurement and IT organizations that want greater flexibility in executing a procurement technology architecture and strategy than what is offered by the majority of suite-based solutions on the market today. Ivalua is generally at the front of the pack in Spend Matters’ “configurator” persona of just about every SolutionMap we look at for our 2019 Q2 results — and the lead dog if the pack includes only the suite vendors.

If you've already read Part 1 of our updated, seven-part vendor snapshot on Ivalua (which includes a detailed company and solution overview), then you know that you're either going to be attracted to the depth, breadth and configurability of the solution — or perhaps overwhelmed by it if you're new to the advanced sourcing and procurement game. With the massive flexibility that comes with massive configurability, there is also a non-trivial degree of configuration settings to pay attention to. (See Part 2 for an upstream solution overview and Part 3 for details on the downstream capabilities.)

In this Part 4 edition of the vendor snapshot, we are going to dive deep into Ivalua's product strengths, providing facts and expert analysis to help a procurement organization decide whether they should shortlist the vendor. Of course, it’s best to read the SolutionMap analysis for all the providers in question. For example, an organization that is putting Ivalua head-to-head with Coupa should compare and contrast what we say here versus what we say in Part 2 of our Coupa vendor snapshot because near-equal scores in SolutionMap do not imply near equal capability in all areas, and definitely not in the areas that might matter to your organization the most.

Commercial Value Management (Part 2): Using Next-Generation Contract Systems to Integrate Operations, Financials, Risk and Technology

Let’s start this piece with a question: How are high-flying SaaS providers measured?

Answer: Growth (hopefully profitable) through repeatable subscription-based revenue.

And what are those subscriptions? Contracts.

The enterprise value of these companies, like others, is based on the promise of future cash flows that are increasingly built upon a portfolio of contracts. Want to maximize enterprise value (like the CEO)? Better get good at managing contracts! This is not in the way that your legal department might think of contracts, but rather in a business sense that maximizes commercial value within those contracts that will add up to enterprise value.

Put another way: If chief procurement officers want to move from “chief spend officers” to “chief value officers,” they’re going to need better strategies and tools to do value management.

“Value management” is the highest level of procurement’s evolution in a framework that I developed in my previous life leading procurement research at The Hackett Group.

The problem is that while there are great tools for spend management, when you start going broader into demand (and multi-tier supply) and deeper into financial value flow beyond single-tier cash disbursements to suppliers, the technology requirements aren’t yet well supported by existing tools and vendors.

In Part 1 of this Spend Matters PRO series on commercial value management (CVM), we highlighted the fact that contract management systems are morphing from legal documents focused on transferring risk onto your trading partners, and toward systems that model all B2B commercial (and even non-commercial) promises with trading partners, regulators and even just internal stakeholders. The financially related “promises” or “commitments” are really obligations/rights that can be viewed as liabilities/assets. And these aren’t just ledger entries to close the books for regulators, but rather living, breathing promises made up and down the supply chain to deliver value to customers — at a lowest total cost of course!

Unfortunately, this chain of value doesn’t exactly flow across the fragmented landscape of systems out there. It’s hard enough to see contracted revenue & cost/spend flows in the direct materials supply chain where only a few advanced firms can stitch together some semblance of integrated business planning that brings in multi-tier supply-aware cost modeling and contracting (e.g., buy-sell arrangements for volatile commodities). Now, consider the services supply chain and an XaaS world where omni-channel value chains need to merge products and services.

For example, think about the mind-numbing complexity of field services operations where customer warranties (contracts) and service levels (contracts) need to be translated to supply fulfillment that can include leased equipment (w/ contracts), outsourced transportation services (and contracts), third-party contractors (directly contracted or via a service provider with its own contract), and even outsourcing providers (with BIG complex contracts) who might run the whole shebang for you. These contracts, sub-contracts, MSAs, SOWs, POs (a contract), etc. all have information in them related to direct committed revenue and costs/spend, but also hints at potential spend and business risk depending on what’s in (or not in) those contracts.

But, if you’re a CFO trying to manage your spending (“Spend” with a big “S” and not just supplier spend with a small “s”) and see both types of spending in terms of: * Tying spend to revenue to understand profitability
* Seeing and shaping spend and resource commitments before they occur
* Cash flow implications of that spend
* Category and supplier views to maximize value from supplier spending
* Spend volatility based on price risk, volume risk, competitive risk and other supply risk factors like geo-political risk (e.g., trade wars) and regulatory risk (e.g. data privacy)
* Projects that drive this spending (e.g., in project-intensive industries)
* Drivers of this spend that are hidden (e.g., IT/telecom contracts of all forms)
* Legal spend (internal and external) to manage all of these contracts!

The problem is that you don’t have a single system to see all this. You have a G/L to close the books and maybe a planning-and-budgeting application rather than the “financial control tower” (go ahead and trademark that — it’s available) that you’d love to have something like an EVA/ROIC-type model that drives all the way down to the atomic contracts and execution systems. And if you’re good, you have a CPO with a single spend database and contract repository.

But, let’s face it, even for those firms with this, the contract is still usually a document artifact to refer to and not a dynamic system with complex pricing modeling and linkages to dozens of execution systems in the field that are REALLY governing the commercial aspects of operations. All you likely have in your contract repository is a field called “contract value.” And even in the simplest case, and even with the most modern S2P application suite, you’re likely matching supplier invoices to POs with payment terms that aren’t likely staying synched with the original contract.

So, contract data and associated CLM systems must transcend their legal artifact role and even move beyond the level of contract clause libraries and associate basic clause metadata. They need to go much deeper into the business realm (and not just the legal department realm) and be able to model and manage commercial data much more deeply. Doing this requires improved systems that manage what we call commercial value management — which is about commercial lifecycle management rather than contract lifecycle management. “Spend Management” is great, but spend is what you pay, and value is what you get. So you need to be really clear on who gets how much of what, under what conditions, and what happens if they don’t!

We spent a fair amount of time in our last PRO series installment that dove into the specific elements of CVM. In this second SpendMatters PRO series installment, we’ll dive primarily into the buy-side aspects of this topic and discuss how procurement organizations — and procurement’s functional peers in finance, IT, legal, GRC, SCM, sales and HR (and any related CoE combinations) — can use contracts as commercial data hubs to better support not just basic buy-side CLM within a source-to-pay context, but also how to use it to better connect procurement with these internal partners to help them manage spend/suppliers in their functions individually and also collectively with each other — and out to external stakeholders.

We’ll also highlight a few areas where CVM support emanating from a next-gen CLM platform can likely disrupt a few existing niche markets within and outside of the procurement realm.

Ivalua: Vendor Snapshot (Part 3) — Downstream Solution Overview

supplier network

Ivalua has been growing steadily since Spend Matters’ comprehensive update in 2016, with the suite provider adding clients, offices, employees and capability around the globe. After we provided an updated background in Part 1, we delved into Ivalua’s primary upstream solution components around spend analysis, strategic sourcing, direct sourcing and contract management in Part 2.

Today, this seven-part Spend Matters PRO series will continue our solution overview with a look at the downstream components — namely catalog management, e-procurement and order management, e-invoicing, expense management, payment management and IVA for guided buying. After we review these downstream components, we’ll finish up our solution review with a couple of the cross-platform capabilities around risk and performance management, supplier information management and master data management (MDM). After we finish with our solution overview, in Parts 4 and 5, we will dive into Ivalua's particular strengths and weaknesses from a solution perspective.

Ivalua: Vendor Snapshot (Part 2) — Upstream Solution Overview

gig economy

In Part 1 of Spend Matters' seven-part PRO series, we provided an updated background on Ivalua, which has been growing steadily since our last Vendor Snapshot in 2016, adding clients, offices, employees, customers and capability around the globe. No longer the Rodney Dangerfield of procurement, Ivalua is finally getting some real respect, having just reached unicorn valuation status in its last funding round.

There are a number of reasons for this, some of which revolve around services and global support capability, and others that revolve around its extensive solution platform. The latter is the subject of our articles today and tomorrow, where we will overview all of the major components, starting with the upstream ones today. Then, after we review the downstream components in Part 3, we will dive into Ivalua's particular strengths and weaknesses from a solution perspective in Parts 4 and 5.

10 Reasons for Procurement to Work With Payments (Part 3)

early pay

Closing the payment gap – not just the invoicing gap – remains a Holy Grail for procurement organizations looking for greater oversight and control in transactional purchasing and even supplier relationship management. It’s also a means to bring finance and procurement organizations closer together – and to prove that finance is really procurement’s ally in the struggle to wrestle the maximum amount of utility out of P2P programs together, rather than separately. As my colleague Pierre Mitchell has noted, “any land grab is usually about job security built upon the pillar of bureaucracy.” In other words, finance and procurement must really be in the payables thing together.

The 10 reasons for procurement to work with finance departments are:

1. The value of control and oversight of the end-to-end transaction with suppliers
2. Building greater invoice/transaction insight that can bridge the visibility gap in getting line-level detail to supplier invoices without having to request information from suppliers
3. Being able to quantify efficiency driven metrics through a Trojan Horse adoption approach to e-invoicing
4. Reducing supplier risk
5. Capturing savings/leakage through closing the transaction, invoice and payment loop
6. Not getting taken advantage of by vendors that hide the total cost of P2P implementations by masking the amount suppliers are charged
7. Flexibility on supplier engagement/fee assumption in the case of supplier network models
8. New securitization/capitalization opportunities (e.g., securitizing the discount of forward payables through converting the discount classification to revenue)
9. Effectively addressing payables also forces addressing the “payment clock” question as early as possible to capitalize on opportunities.
10. Create powerful “information exhaust” around the optimal means of engaging with suppliers on a total cost basis – beyond just reducing risk. This not only includes capturing additional discount opportunities through payment integration, but also understanding how and when suppliers (and different groups of suppliers) are taking advantage of different payables opportunities.

Ivalua: Vendor Snapshot (Part 1) — Background

FM Global Resilience Index

A lot has changed since Spend Matters’ last full snapshot on Ivalua in December 2016, when we said (with apologies to the late comic) that Ivalua was the Rodney Dangerfield of procurement suites in terms of not getting any respect. At the time, we clearly noted that “if we add up the differentiated combination of its architecture/platform, industry enablement, functional/modular capability (across the source-to-pay continuum), analytics and ‘overlay’ process support capabilities, the sum of the Ivalua package stands out from all others in a true ‘deadpan’ way — albeit with no laughing involved. In short: Ivalua deserves much more respect than it gets from a market that is typically less familiar with it compared to larger peers.”

Since then, Ivalua has raised two massive rounds of capital, the first in April 2017 when it raised $70 million from private equity firm KKR (to build a war chest to accelerate R&D, expand its global footprint, triple down on marketing and make strategic acquisitions), and the second funding round just a couple of months ago when it raised another $60 million and achieved “unicorn” status. Now it's the envy of its peers, and we know for a fact that the other big players — Coupa, Jaggaer, Oracle, GEP and SAP Ariba — have taken notice.

But before we put the cart before the horse (or, in this case, the analyst’s conclusions before the background and solution overview), we're going to back up and start at the beginning now that you have an idea of what's to come.

Ivalua is one of the few source-to-pay (S2P) providers that has built its end-to-end solution on a single technology stack from the ground up, and one of the fewer still that doesn't try to grow through an acquire-and-integrate approach (like SAP Ariba, Jaggaer and even Coupa), or replatforming (like Determine or Oracle), but rather, develops its own native stack (as has GEP, Zycus, and mostly Coupa). Furthermore, it's also one of the few that has enough depth and breadth across each core area to enable it to serve as a single technology S2P suite for the procurement organization. That should not be a surprise given that the firm has been building this platform in-house on a single stack for the past 19 years while working with a global customer base.

This is important because there comes a point when the overall procurement organization performance beyond sourcing-identified savings and P2P-catalog compliance relies on a single extensible platform approach that goes beyond just functional enablement within procurement. Plus, if you want real automation/RPA, guided procurement and real AI someday — you’ll really want a single-workflow-driven platform that works on a single data store, because no advanced technology works without a sufficient amount of good, clean, harmonized data.

This revised, seven-part Spend Matters PRO snapshot provides facts and expert analysis to help procurement organizations make informed decisions based on Ivalua's source-to-pay capability, its suitability for specific industry segments, its global service and support footprint, and how each of these stacks up to its competition. (Hint: Ivalua is second in four out of five Source-to-Pay and Strategic Procurement Technology SolutionMap rankings, and second in two out of five P2P maps — namely the Nimble and Configurator personas — in terms of analyst score in the 2019 Q2 SolutionMap release.)

Part 1 of our updated vendor snapshot provides a company background and a summary recommended fit suggestion for when organizations might want to consider Ivalua in the procurement technology arena. Parts 2 and 3 provide a detailed solution overview. Part 4 will dive into the strengths, and Part 5 looks into the weaknesses across the product line. Part 6 will provide commentary and a SWOT analysis, and Part 7 will provide a comparative market overview and final summary analysis.

SAP Intelligent Spend Group analysis: 10 observations of the new Ariba-Fieldglass-Concur business unit

Last week, SAP released its financial results for the second quarter 2019. In the announcement, presentation and earnings call, SAP broke out revenue for its new Intelligent Spend Group (in previous quarters, it broke out revenue for the similar “Business Network” segment). This business unit consists of SAP Ariba, SAP Fieldglass and SAP Concur. According to SAP, quarterly performance for the group represented approximately $880 million (USD) in revenue based on actual reporting in euros of €786 million. At constant currency levels, revenue was up 17% year-over-year, or 22% factoring in currency changes.

This Spend Matters PRO brief begins by highlighting some of the additional detail provided on the earnings call and then provides 10 observations on the current state of the business unit based on customer, channel and other checks conducted by the Spend Matters analyst team. Spend Matters PRO subscribers also have access to previous coverage of SAP Intelligent Spend Group. Recent briefs include:

* SAP Intelligent Spend Group is future for Ariba, Fieldglass, Concur (Part 1): Customer Analysis, Solution Integration, Roadmap [PRO]
* SAP Intelligent Spend Group is future for Ariba, Fieldglass, Concur (Part 2): Hard Questions on Integration [PRO]
* SAP Intelligent Spend Group is future for Ariba, Fieldglass, Concur (Part 3): How can the SAP spend platform ‘Run Simple’? [PRO]
* With Barry Padgett leaving SAP, what’s next for new Intelligent Spend Group? [PRO]

The Artful Design of Procurement (Part 2)

Spend Matters 50/50 2016

As noted in our last post, as I was writing up some notes from the Ivalua NOW 2019 conference, which it gave the theme “The Art of Procurement,” and which probably seemed more artistic when it was held at Le Carrousel Du Louvre, and not the Renaissance Chicago (but you’ll have to ask my colleagues Michael Lamoureux and Peter Smith, who attended the Paris event and posted their notes here, there and everywhere). But at the end of the day, since the better theme is not so much just about art (even though there is a definite craft/“art” to doing procurement transformation — and using digital as part of that transformation), but about the proper design of procurement and the procurement process, I decided to pen these pieces.

In Part 1 of this provocative PRO analysis, after setting the stage, I tried to really define what art vs. design was in a procurement context. Today, I’m going to try and build on that to describe:

* Design-centered procurement and platform design rather than just product design
* Platform enablement of the “participative art” of procurement
* A counter-intuitive palette: low code software platforms
* The procurement practitioner as artist

And I hope to inspire you to be a better artist, who paints a more impressive picture in your daily professional life.