We're living in an SOW age, and as organizations are hurrying to execute their implementation, a strategy has never been more important. Today's VMS solutions have the tools necessary for SOW, so it is time to embrace the technology and leave the spreadsheets in the dust. Join Spend Matters and Beeline for When the SOW Becomes Strategic: Taking Full Advantage of VMS Capabilities on Tuesday, June 28, at 12 p.m. CDT.
Spend Matters Premium Content:
Why is the cloud important? For procurement applications in the cloud there is an inherent “democracy.” Participants, without regard to role or particular software instance, effectively participate on the same platform. This does not in itself mean that there is a neutralization of benefit for one party or the other, but it does mean that while participating in the exchange of value, there may be a greater opportunity for collaboration or discovery. Moreover, cloud levels the playing field internally (for business users) and externally (for suppliers and trading partners). And it does so without regard for size, IT skills, experience and budget (within reason).
In our first article in this series, we noted how in Spend Matters' last PLUS series on RFPs, we gave you some insights on how to write better RFPs in general, which is great when you are buying products and services, but not always enough when you are buying software solutions – especially for yourself. Specifically, the process of understanding the requirements, selecting the right providers to invite, and creating good specifications is a bit more nuanced than just the form, fit and function requirements of a physical component being purchased in the supply chain. Part 1 of this series focused on what was required to truly understand the requirements and the second focused on what was required to truly select a good provider to invite to the table. This article focuses on the creation of good RFIs and RFPs, as we alluded to in the first two parts of this series, and also in our previous series on how to write a good RFP in general.
Companies looking for supplier management solutions have a broad range of choices, ranging from independent solution providers to ERP modules of varying degrees of sophistication and depth. There are numerous challenges that come with identifying the right solutions in the market for an individual procurement organization. These include the fact that consultants and analysts generally have limited experience with the in-the-trenches capabilities of these solutions compared with sourcing and purchase-to-pay suites. Further, the individual capabilities of solutions can vary dramatically, and independent solution providers generally invest far less in sales and marketing in educating the market and building awareness than providers delivering suites or serving other areas of procurement. One provider that warrants consideration in the market is HICX, a London-based firm founded in 2004. It is essentially a supply chain master data management (MDM) solution with a configurable workflow that allows an organization to use it as the supplier (and associated product) MDM system. Even though the company now focuses heavily on supplier information management (SIM), supplier performance management (SPM), supplier risk management (SRM) and supplier compliance management (SCM), it enables end-to-end supplier data management as a result of its strong MDM foundation. It has also recently expanded its capabilities into the contract management area, with a new module that both can complete and complement contract lifecycle management (CLM) solutions. This two-part Spend Matters PRO research brief provides an introduction to HICX, including insight into solution capabilities, product strengths and weaknesses, perspectives on how it stacks up against supplier management competitors and recommendations to potential customers.
In our first article in this series on procurement technology RFPs, we noted that when trying to specify the requirements for a technology solution, you should emphasize not just what the solution should do but also the processes it should enable and the problems it should solve. You are probably not a technology expert, and trying to be one will only paint you into a corner. In other words, don’t over specify and overly constrain the supply market, but rather, tap its innovation to solve your problem. But creating an RFP that captures the true requirements and educates the potential provider as to what the organization really needs to accomplish to be successful is only the first step to success. The second is inviting the right suppliers to the party. But how do you identify the right suppliers? That is the subject of this article.
In Spend Matters' last PLUS series on RFPs, co-written by the author, we gave you some guidance on how to write better RFPs in general, which is great when you are buying products and services, but not always enough when you are buying technology platforms to power your procurement-enabled enterprise. In this short follow-up series, we are going to give you some in-depth advice on how to write even better RFPs for procurement solutions. Software applications are not like products and services. They don't just power the commerce your business relies on, they power your business. And procurement applications are even more unique. They power the information, commerce and decision flows that your business runs on — and these flows have to be optimized for your business. Thus, it is imperative that you select the right applications, and this will only be the case if, and only if, you have the right RFP — and the right RFP process — that will encourage the right suppliers to respond.
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.
Verian-Basware Deal Analysis: North America Expansion, Solution Comparison and Integration Strategy [PRO]
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.
Per Angusta was born out of the determination of the founder, Pierre Laprée, to escape Microsoft Excel Hell (which is where most Procurement organizations still in the damnation of the Procurement Dark Ages still reside) where bad strategies, losses in the billions and a supply chain disaster waiting to happen is the cours de la jour. When Laprée was trying to manage his sourcing pipeline, projects and savings projections on a daily basis in Excel, he found that it was incredibly time-consuming, constricting and downright painful. The amount of time it took to consolidate, normalize and analyze data was enormous and the end result was not always reliable. Finding no solution in the market designed specifically for sourcing pipeline management, he decided to form Per Angusta and build one. And that's exactly what Per Angusta is — a SaaS platform to build and manage sourcing pipelines, track savings for organizational validation and make procurement's impact visible to the organization — which, as per Sigi Osagie (author of Procurement Mojo) is the key to building your procurement brand. This is Pierre Lapree’s story — and that of his new firm, an upstart competitor to Sievo, Zycus and others in the business of guiding and measuring procurement results, albeit in different ways.
I wanted to pen a quick post to our PRO members about the importance of change of control clauses in contracts. I’m writing this because there are a number of source-to-pay vendors (both suite and non-suite) currently being shopped on the market, and I think practitioners are generally unaware of their exposure in cloud/SaaS transactions if they have not negotiated change of control clauses in their contracts. On some levels, this is moot. If a typical private equity firm — as opposed to a bottom feeder one attempting to flip a firm or simply enforce patents — acquires a vendor, I would view it as a net positive from a practitioner perspective. But when another tech firm acquires a vendor whose software you’re using, it’s another story. This Spend Matters PRO analysis explores different types of vendor transactions (which may be in your favor as a customer versus not from a change of control perspective) and provides three actionable steps on how to negotiate these clauses and more.
Most of us who are less than 50 years old today associate the early rise of the graphical Internet age (think Netscape) with the origins of near ubiquitous desktop computing in the office and eventually, two decades later, ubiquitous networked and collaborative business productivity tools — not to mention the adoption of procurement and supply chain technologies that are finally delivering on their promised ROI more frequently than not, which was not the case a decade ago. Yet the story of workplace computing goes back much longer, to a very different time and place.