Total cost of ownership of the procure-to-pay process is not simply about measuring the costs associated with acquiring a P2P platform, it’s about tracking all P2P processes and managing them as a business key performance indicator. Managed well, the TCO P2P KPI can positively impact the bottom line of any business. Many organizations think that when acquiring a P2P platform, a firm business case needs to be constructed based on the total cost of the platform and high-level benefits that are reasonably achievable. But there’s actually a more effective way to think about the cost and returns of P2P technology. In this Spend Matters PRO brief, we explore this new way of measuring P2P returns and cost through a modified TCO approach.
Category Archives: Technology
If you’re still skeptical about the relative importance of work intermediation platforms (WIPs) as a potential game changer in enterprise direct sourcing and engaging the contingent workforce, a recent report by McKinsey & Company may help you make up your mind. The report, “A Labor Market that Works: Connecting Talent with Opportunity,” takes a wide-angle perspective on the increasing role of platforms in the total labor market, not just the growing contingent workforce segment. The analysis of labor platform developments emphasizes the likely macroeconomic impacts, although it only scratches the surface of how enterprises are responding to these trends.
Earlier this week, Tradeshift and C2FO announced a partnership that will enable users of the e-invoicing, connectivity and supplier network platform to access C2FO’s discounting and working capital management technology through the Tradeshift platform. On the surface, the relationship may sound somewhat similar to both an earlier partnership Tradeshift had with Taulia (before going its own route with dynamic discounting) and alternative offerings in the sector that bridge transactional connectivity between buyers and suppliers and trade financing capabilities (e.g., Tungsten, Taulia). But dig below the surface and Tradeshift and C2FO appear to be starting a relationship that could prove much for strategic for customers of both solutions – and potentially an archetype of partnerships to come in the procurement, supply chain and trade financing worlds. This Spend Matters PRO research brief provides an overview of C2FO’s unique approach to driving liquidity and working capital solutions that bridge both buyer and supplier needs. It also provides a succinct overview of the business and technology implications of the partnership and recommendations to customers of both products.
Supplier collaboration platform Tradeshift hasn't been well known for finance outside of accounts payable. It has offered dynamic discounting, to be sure, but the feature has been used by only a handful of clients. That approach is about to change, however, as explained in a breaking article on Trade Financing Matters. As of Tuesday, Tradeshift will partner with C2FO, giving it access to the financial technology company's working capital market as an internal app. It’s clever on the surface, analyst David Gustin and Xavier Olivera explain, but how will the partnership work in practice?
Oildex, a service of Transzap Inc., announced Monday it acquired procure-to-pay provider OpenInvoice from Automatic Data Processing Inc. Spend Matters was aware that ADP had entered into a formal process many months ago to sell the OpenInvoice business line, which it originally acquired in 2010 from Calgary-based DO2 Technologies, also known as Digital Oilfield. Oildex is well known in the oil and gas industry for its core invoicing and supplier on-boarding capabilities, which enable business-to-business and financial systems integration. With the addition of OpenInvoice products to its value proposition, Oildex will strengthen its position and services offering by delivering improved integrated capabilities.
In previous Spend Matters coverage of the announced partnership between BravoSolution and Verian, analysts discussed some of the implications of the new relationship. I had a chance to spend some time with Tehseen Ali Dahya, the CEO of Verian, to do a bit of a deep dive, and it gave me a much better idea of the what the partnership is and is not all about. In this Spend Matters PRO analysis, I’ll lay out the details and explain the implications for current customers, future customers and the market in general.
After many years of relentless bombardment with acronyms like SaaS, IaaS, PaaS and BPaaS, I would not blame procurement professionals if they were shell-shocked, cynical and unresponsive when yet another term joins this list. Still, the reality is that all of these acronyms have been useful designators of significant milestone developments tracing the increasing virtualization of information technology, from collections of assets that businesses owned and managed to what in effect are services that can be consumed with relative efficiency and flexibility. The most recent of these acronyms, iPaaS, may be the most relevant of the series acronyms since SaaS, when application software shifted from something installed and managed on-premise to being a virtual service or cloud offering.
Work Intermediation Platforms (WIPs) are emerging and evolving—not just as isolated platform-based service providers, but as parts of digital value networks that connect with other platforms and service providers. There are already more than 250 WIPs in the world today allowing labor services consumers and potentially tens of millions of workers to establish and transact work arrangements almost entirely through digital, platform-based processes. This Spend Matters PRO analysis explores how this broad process of connection development not only leads to more capable platform ecosystems for attracting, engaging and servicing labor resources and capabilities but also to integration with larger enterprises and the formation of new digital channels for sourcing, engaging, and procuring talent alongside existing vendor management systems, managed services providers and other specialized services procurement ecosystems.
A recent post by Spend Matters Contributing Analyst Michael Lamoureux got me thinking about the role mergers and acquisitions are playing in shaping the procurement technology landscape today. As I see it, the recent deal activity can help a number of organizations realize the often elusive acquisition synergy goal of having 1+1 = 3. But Michael, as may be clear from the title of his post, argues that M&A in procurement technology brings more sizzle than steak, especially from both a solution and customer perspective and a translation to financial returns. Here’s the broader question: How can 2 good minds (I hope!) examine the same topic and arrive at 2 very different opinions? I take a more optimistic lens. For reasons both planned and unplanned, M&A within the procurement sector has brought more positives than negatives, at least with many bigger name firms.
Spend Matters welcomes this guest article by Vroozi. As Spend Matters and Vroozi wrote in their jointly produced research paper Declaration of the New Purchasing: A Buying Manifesto: "Closed systems – by design or by technology limitation – will fade and user choice will facilitate an accelerated natural selection away from proprietary applications and networks and those that simply fail to interoperate. Closed system environments will turn users off by limiting choice. Much as Yahoo failed to become the online e-commerce portal – not to mention search tool – of choice because of its proprietary systems, Amazon succeeded because of its open architecture that allowed all participants (tech users, suppliers, distributors, customers, internal Amazon businesses, etc.) to “plug in” via open and published standards."
My colleague Michael Lamoureux, who runs the blog Sourcing Innovation and is also a contributing analyst at Spend Matters, recently posted a critical take on the state of M&A and procurement in which he argues that, despite rising M&A activity within the extended procurement technology ecosystem, the deals often makes less sense for firms to come together than it should. But is he right? As someone who has directly been involved in over a dozen transactions in the past few years, I think Michael makes a number of solid points but misses the mark in terms of why deals get done, as well as many of the more subtle reasons behind the 1+1=3 synergies many of the providers in the space that have done deals are starting to realize.
The Washington Post announced Monday the launch of what it is calling The Washington Post Talent Network, a private, homegrown work intermediation platform (WIP) that will be used to manage the Post’s far-flung network of freelance contributors. In some ways, it seemed like it was only a matter of time before something like this would emerge in the news and media industry – but the big surprise here might be how.