GEP Does a Full Procurement Suite: But How SMART is it?

The old logic that consultants should never develop a full-scale SaaS-based product set is now, officially, wrong.

GEP opened up the SaaS kimono to us recently, and the Spend Matters research team spent nearly a week reviewing its suite and individual functional capabilities. Our first installment in our perspective and analysis on GEP’s technology, GEP: Vendor Analysis (Part 1) — Background & Solution Overview, provides a background on GEP and an in-depth look at the “SMART by GEP” source-to-pay (S2P) suite and modular capabilities.

There are numerous reasons why GEP has won some of the largest deals over bigger software names in the procurement technology market in recent quarters. But it’s difficult to understand why without delving into GEP’s suite and underlying modules (even if the provider cringes if you use the term “module” to describe its individual products), not to mention the firm itself.

Still, even if you digest most of our analysis and do your homework in getting to know GEP, please don’t look at the provider as an archetype for other services firms wanting to get into software — or for that matter, selling it to you. We don’t see other providers succeeding in what GEP has done as a rule, especially when it comes to developing a full procurement suite.

GEP has done something we don’t suspect any others coming from a services background could pull off successfully, and at scale. There are dozens of reasons why the billable hour still conflicts with writing code, especially code that flows into a full procurement suite — and packaging, marketing it and selling it for that matter. But GEP has thrown services and software convention out of the window, and has done so successfully at a scale that will impress even those from the cloud applications world. Both incumbent software providers (e.g., SAP Ariba, Coupa, BravoSolution, SciQuest) and services firms alike (e.g., Accenture, AT Kearney, KPMG, Deloitte) should pay close attention to what GEP has done, albeit for different reasons.

Not so Fast

It’s our view that most services provider should not give up Excel and PowerPoint and trade it in for Java, Ruby or PHP, especially when it comes to developing a transactional procurement suite. In fact, we’d personally advise 90% to stop before they even begin. For some, it may be easy to think you can leverage clients, analytical skills and expertise when it comes to commercializing procurement technology that spans strategic and transactional components.

But trust us: It’s not as easy as it seems, especially for consultancies and services firms that want to move beyond developing solutions that only a handful of power users will interact with.

Consultants are generally poor at the skills required to run a high-growth, SaaS-based software firm. There are a number of reasons for this, but perhaps the most important is that in consulting, when it comes to deliverables, the 80/20 rule does not apply (except perhaps to sourcing strategies). Client empathy, exhaustive analyses and a commitment to perfection are all key, which is what the best consultants excel at.

But with high-growth SaaS products, the worst thing you can do is overanalyze a problem and then overbuild a solution. Everything is ultimately a form of compromise and often non-analytical optimization, managing trade-offs of usability, feature/functions, adoption, scale, configuration/implementation and integration. And throughout the early lifecycle of a SaaS company, the voice of the customer is absolutely paramount (although unlike in consulting, the same level of empathy is not always essential).

And these comments refer just to initial development and commercialization. Packaging and bringing a market to set of products and module to market — let alone a suite — and then scaling it is something else entirely.

Enter GEP

GEP is not like any other firm we’ve covered in the procurement solutions market. The founders and management team all but entirely isolated themselves from noise in the market over the past decade, instead focusing all of their efforts on clients (now customers in a software context). And this is what led them — along with believing they could “do it differently” — into methodically developing a procurement technology suite over the years.

For those who would not have otherwise considered GEP as procurement technology suite provider, our hope is that our PRO research series provides enough detail to help you decide where the firm should stand on your shortlist of vendors to consider. Granted, there’s no substitute for spending a good day with GEP and its products to understand the unique DNA of the firm.

In this case, “savings is not believing,” to modify a phrase GEP used to say. Rather, seeing is believing — or at least a refreshing experience given how GEP stands out from the crowd in different ways.

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