Analysis Content

Watchdog Gone Wild? Why New York City’s Procurement Technology Overhaul is Actually a Good Thing

magnifying glass analysis

Recent media reports have alleged that New York City has been overpaying for its implementation of procurement software suite provider Ivalua in NYC’s procurement transformation efforts. The reports have used a watchdog group’s analysis that has tried to compare the seemingly high price tag of the NYC implementation of Ivalua to a smaller implementation of the city of Dallas by a more niche software provider named Bonfire. Ivalua and Bonfire are two procurement software providers that Spend Matters covers within the broad procurement provider ecosystem.

The headlines appeared suspicious, and we decided to take a deeper look at the projects and the providers in question. Our analysis indicates that one report’s direct comparison of these costs is misleading and flawed. We have a few takeaways from the group’s conclusions, and our analysis indicates that the NYC deal could easily pay for itself and be a boon for the city.

Corcentric to Acquire Determine: Valuation, Transaction Overview, Customer Recommendations and Competitive Landscape Analysis (Part 1) [PRO]

Earlier this week, Corcentric — a provider focused at the intersection of accounts payable automation, order-to-cash, trade financing, procurement consulting and group purchasing organization (GPO) software and services — announced its most strategic software acquisition to date: Determine.

But what are the highlights of the transaction? How do the proposed terms of the combination address Determine’s balance sheet liabilities — and more important, what is our summary analysis of Corcentric + Determine?

In this two-part Spend Matters PRO brief, we will provide an overview of the combination (by the numbers), an analysis of the transaction/valuation, our “elephant in the room” observations, summary recommendations for Corcentric and Determine customers and an analysis of the competitive landscape implications of the transaction.

In later PRO research briefs, we will offer our perspective on Determine’s functional strengths and weaknesses in both the procure-to-pay (i.e., e-procurement and invoice-to-pay) and strategic procurement technologies (e.g., sourcing, CLM, etc.) areas and what these bring to Corcentric, and, with sufficient distribution (that they lack today, at least in North America), what they could bring to the broader source-to-pay market.

Procurement Technology and Solutions M&A Outlook: 10 Predictions for 2019 (Part 4) [PRO]

Today, I’ll share a critical 10th prediction (arguably the most important of all) of our M&A predictions series. Please allow me to indulge my last prediction in a folksy, CliffsNotes way to get both the seasoned experts on sector deals — of which we can count on just a few fingers — and everyone else on the same page as to what’s really happening.

In the third installment, I shared three additional predictions exploring how the procurement technology landscape is shifting as we enter 2019. The most recent prognostications centered on the rising intersection of procurement technology with payment and financing as a consolidation driver, more sellers engaging in proactive processes and unorthodox groups of strategic buyers emerging from left field on some deals.

These predictions build on the second installment of our M&A predictions for 2019, during which I explored an expanding focus on services procurement (assets), the increasing interest in strategic procurement technologies (SPT) and the scarcity of e-procurement and procure-to-pay targets left in the market.

And in the first installment in the series, I analyzed the deals that have happened already in 2018, as well as our first three of 10 prognostications for next year. First, private equity firms will play an increased role in the sector. Second, valuations will be all over the map. And third, peripheral players will respond to the “Amazon effect."

Happy holidays everyone and happy deal hunting in 2019! Let’s get into the final prediction.

Coupa and Hiperos: Customer Recommendations [PRO]

This Spend Matters PRO research brief provides analysis in support of Hiperos and Coupa customers following this week’s news that Coupa is acquiring Hiperos.

We’ve examined the implications of the deal on the supplier management landscape and done a head-to-head comparison of the providers.

Now this brief includes recommendations for immediate steps and longer-term considerations that are generic to procurement technology M&A transactions in general — such as change of control clause implications — and specific to this acquisition.

We encourage Spend Matters PRO practitioner clients who are using or considering Hiperos to contact us for more information on how the acquisition could affect them.

Now read on to get the customer/prospect recommendations for Hiperos and Coupa.

Coupa and Hiperos: Supplier Management, Compliance and Risk Landscape Implications [PRO]

This Spend Matters PRO brief explores the competitive implications of the Coupa-Hiperos transaction on the supplier management landscape. The analysis includes summary sector M&A implications and summary landscape/competitive implications. It also explores the potential impact on closer competitors to Hiperos (e.g., Aravo), more distant, network and community oriented peers (e.g., Achilles, Avetta, Browz, etc.); and “sleeping giants” on the periphery of the market such as D&B and Thomson Reuters.

Perhaps most relevant of all, as “compliance as a service” becomes more commonplace as a component of source-to-pay systems in areas ranging from supplier qualification to transactional/invoicing areas, we believe these latter groups may begin to come into contact with Coupa for the first time as the worlds of supplier intelligence and hybrid software, network and compliance collide in a networked manner across various industries.

Coupa vs. Hiperos: Supplier Management Head-to-Head Comparison

With news this week that Coupa is buying Hiperos, it’s time for a head-to-head comparison. The providers could not be more different in the pragmatic application of their supplier management technology to solving different procurement challenges. But on paper, both providers offer broad-based supplier management capability. And both deliver functional capability that (usually) meets or exceeds the functional benchmark for each of the areas that make up Spend Matters’ Q4 2018 Supplier Relationship Management and Risk SoultionMap. Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset, along with the commentary of the Spend Matters analyst team. These head-to-head columns share the insights of each quarterly SolutionMap report for SolutionMap Insider Subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Coupa and Hiperos against each other in the supplier management evaluation ring to understand where each provider is the most appropriate fit.

Not yet an Insider member? Here’s a preview: In a majority of supplier management categories which include master data management (MDM), supplier information management (SIM), supplier portal, supplier initiative management, technology, configurability and services — Coupa convincingly comes out on top. But Hiperos shines in specific areas that make it an ideal fit to enable specific supplier and third-party compliance and risk management scenarios.

Overall, the results suggest that the right solution will vary based on different organizational requirements. You’ll get no argument from us that supplier management selection processes will reward procurement organizations that tailor provider selection to their specific needs. But despite this (needed) debate, the Spend Matters team sees how combining these two solutions offers the potential for the proverbial — yet often elusive — “1+1 = 3” in M&A by enabling procurement, IT, finance and other teams to work together to manage their collective supply base while reducing overall risk. As we’ve noted before, “Using a holistic approach to managing suppliers and spend can shine a proactive light on vulnerabilities, while reducing risk and protecting brand reputation.”

But how will each product enable this? Let’s dig in and put Coupa and Hiperos supplier management capabilities head-to-head.

Coupa buying Hiperos: Acquisition Facts, Analysis and Insight [PRO]

Just this morning Coupa announced it was acquiring Hiperos as a carve-out transaction from Opus, which previously owned the supplier management, compliance and risk management solution provider. This Spend Matters PRO analysis provides background and quick facts on Hiperos. It also offers analysis and insight on what the transaction brings to Coupa from a capability perspective and attempts to answer the question: Why Hiperos?

Subsequent Spend Matters subscription briefs (PRO and SolutionMap Insider) will provide insight and analysis of the transaction by exploring the competitive implications of the acquisition for the supplier management and compliance market, offering additional customer insight and recommendations and providing a “Head-to-Head” analysis of Coupa and Hiperos from a supplier-management capability perspective.

Read this briefing to find out more about what Coupa is getting and possible reasons behind the Hiperos deal.

Procurement and Insider Trading: What You Need to Know [Plus+]

Procurement has increasing access to multiple levels of insider information. And just as we have seen enforcement impacting procurement and supply chain activities centered on FCPA compliance, it is likely an increasing set of activities tied to potential information leaks in the capital markets area will come under increased scrutiny as well. In the first installment of this Spend Matters Plus research brief examining the potential for insider trading based on procurement information, we covered lessons from other areas of the business as well as introducing the types of insider information that could be acted on by those inside the company or shared with external hedge funds or other parties. In this installment, we explore what you need to know about the potential for procurement and insider trading based on increasing data availability within procurement and supply chain organizations and key action steps you can take to prevent breaches.

E-Procurement Catalog Management and Search: Introduction and Tradeshift Analysis (Part 1)   [PRO]

Most of the leading solution providers featured in the E-Procurement and Procure-to-Pay SolutionMaps can handle many of the nuances required of search and catalog management. For all of the gory details of what comprises catalog management and why it matters as part of an e-procurement system, we encourage PRO subscribers to start here:

Now that you know what catalog management comprises — and assuming you’ve read the “Just Coupa It” analysis of Coupa’s approach to search and catalog management with Aquiire and Simeno — we can explore how other solution providers approach this complex and nuanced area.

Based on insights gained from SolutionMap analysis, this series will explore how other leading providers approach search and catalog management. Today, we introduce the topic and share how Tradeshift, the first of Coupa’s peers that we’ll investigate in this series, tackles catalog management and business user search.

If you are currently using an e-procurement solution or considering purchasing a new technology, this is a critical series that will help you understand one of the most important functional “plumbing” elements within transactional purchasing and procure-to-pay, as well as what other capabilities top performers offer as part of their broader P2P environments. Read on!

Are Your Procurement KPIs Balanced or Obsolete? [Plus+]

As our Spend Matters Plus analysis of procurement key performance indicators (KPIs) continues, we will turn our attention to additional metrics by which you can measure procurement performance including supply base development and spend under management. We will also examine how to discover if organizational procurement KPIs are off balance, favoring one area over another or the strategic over the tactical, or if they’re just right.

This analysis builds on a prior chapter of this research brief that provides an introduction to procurement KPIs. While intended for everyone in procurement from buyers to chief procurement officers, this series is particularly suited for individuals and organizations looking to put in place the right measurement foundation to change how procurement is viewed by the business from a function that only reduces input prices and “keeps the production line running,” to one that brings new areas of value, from supply chain risk reduction to creativity and innovation.

Foundational Procurement KPIs Every CPO, Supply Manager and Buyer Needs To Know [Plus+]

This research brief is intended as an aspirational piece for more transactional-focused procurement team members who are aiming to add value to procurement and the business beyond mere efficiency improvements and price reduction efforts. It is not a compendium of financial metrics to convince your CFO about the value of procurement – you have to develop your business case tied to your needs and strategy for that. (Though, do reach out to us because we’ve done quite a bit of research in this area as well if you’re interested.) Rather, it is our hope that this series will leave you with a laundry list of prioritized ideas and open your mind to the qualitative side of the business – and the ways in which you can begin to measure procurement contribution and key performance indicators (KPIs) to quantify the return of the various activities you’re up to.

In the first installment of our introduction to KPIs and related considerations, we will examine why KPIs matter and how to use them and discuss basic procurement metrics, the role of innovation in setting measurement variables and how certain KPI approaches can mislead.

Services Procurement History: Staffing Firm Dominance Faces a Challenge [Plus+]

In this Spend Matters Plus research brief, Jason Busch, founder and managing director, introduces the reasons why staffing firms will begin to increasingly share overall contingent market share with alternative models including the direct hire of freelancers/independent contractors, talent marketplaces, individual “out-tasking,” alumni and shared interest pools and related models. We also provide a readiness checklist for procurement organizations increasingly tasked with managing services spend that will offer a quick, honest assessment to show if they are ready (or not) for new models.