‘50/50’ webinar rewind: Spend Matters’ analysts answer questions about 2020 lists of top providers

Spend Matters recently hosted two webinars about our annual lists of top procurement companies called “50 Providers to Know” and “50 Providers to Watch.” The webinars were held for audiences in the U.S. and Europe, and we’ve summarized the Q&As here for readers.

Our analyst Magnus Bergfors, VP of European Research, answered questions from the Europe audience, and Chief Research Officer Pierre Mitchell took questions during the U.S. version.

The bulk of the webinars went over the dynamics of this year’s “50/50” lists, offering insights into the qualifications that Spend Matters’ analysts take into account when creating the lists. The factors for making the lists are informed, in part, by more than 1,000 RFI questions from the 13 procurement technology sectors that we cover in Spend Matters’ SolutionMap, which ranks vendors’ by capabilities and customer feedback.

But with so many determining factors going into these lists, European and North American attendees naturally had some questions.

'50/50' Webinar Q&A

With so many vendors out there, how does the analyst team actually decide on the “50/50” lists?

Magnus: It’s a long process, gathering input individually (by analysts) with our own set of vendors (that we each cover), and then making the case for each one. Vendors on the “Know” list already have a dominant position in their market and sector. They’re not necessarily the big source players, but the dominant ones. On “Watch,” the ones bringing new and interesting things to the table are the focal point. They’re the providers that we think the more digital savvy will want to know about.

How did four of the “Future 5” list graduate to the “Watch” list so quickly?

Magnus: We think these “Future 5” vendors are addressing old processes that have been pain points for many companies for a long time, such as tail spend, and taking a very new, unique approach to fixing it. They may be addressing narrow niches right now, but we keep an eye to see if they manage to grow on their own, or if they may make compelling acquisition targets. Pierre said that getting on the “Watch” list is straightforward as long as they have a good space, funding and a good team.

BuyerQuest has been on the “Watch” list for years. What will it take to get to the “Know” list?

Magnus: The “Know” list follows the dominant players. BuyerQuest is a successful vendor in their space, but like other vendors that remain on the “Watch” list, they need to grow. For BuyerQuest, they need to grow, especially in North America. They’re not big in Europe and need to grow in order to compete with bigger companies.

Why are you no longer considering consultancy firms without the tech component? Why focus only on the tech-centric providers?

Magnus: Tech really is our main focus. Given the amount of vendors in the market, we need to focus on tech since it is our core area. … We’re not completely disregarding them, but we want to focus on tech’s ability to improve the capabilities of digital processes. We are tech analysts at the heart of it.

Why do you not just have procurement organizations pick the companies instead of analysts?

Magnus: Procurement organizations are part of the process, but it’s filtered through analysts. We want to provide a breadth of providers instead of just a vast amount. We especially want to showcase some smaller vendors that other companies are not fully aware of yet. We want to bring this as a service to buying organizations so that vendors can have a look at them for potential help.

Do you see any development where vendors are joining together or joining other procurement platforms?

Magnus: There is the ecosystem trend where platforms and suites are starting to build ecosystems with partner capabilities. This could become more industry-specific or niche. They combine service and technology that can be plugged in. Companies are opening up to the idea of working together, and there are more ideas like this around. Companies are beginning to create platforms for standardized core processes, and depending on solutions, bringing in vendors with specific subject matter expertise.

To what extent do you believe the risk of global recession in the next few years brings risk to smaller suppliers?

Pierre: Like any supply market, small vendors are going to be more exposed to macro and micro conditions, and the pandemic is having effects on all kinds on them. I would generally say that even under financial distress, small vendors with good solutions will find a good home if they’re acquired by a larger player.

The bigger risk to small vendors is doing nothing instead of finding a bigger player to acquire them. Just use this as a risk criteria, and maybe even as leverage. It’s a good time to get a deal on solution providers.

What changes have you seen in RFP activity in the last two months?

Pierre: A month and a half ago, practitioners wanted to get deals done quickly before budgets dried up and have deals locked down and in place. Since then, there have certainly been a lot of things put on hold.

On the plus side, it’s not that they won’t revisit the projects. They’re still going through evaluations and many people have been pretty straight about being frozen with providers. But, many are still driving the processes forward, using freemium offers and starting small just to maintain momentum. Large projects are put on hold and budgetary release has slowed, but things are still moving.

Thinking about how the environment has evolved since highlighting these vendors: Are there new areas that will be looked at moving forward?

Pierre: Certainly. There are a lot of players that will cross over between sectors. There are vendors reinventing new ways of doing old things, and new areas will appear from the augmentation of sectors.

For example, even though risk management is kind of a category-specific solution, risk itself is a large area. Supply chain risk, commodity, each one has its own unique situation. Commodity risk — are we looking at it from a perspective of planning, fraud, regulation or compliance? There’s a lot of areas that are not clean from a business’ process or category standpoint. There’s a lot of opportunity for sector convergence as niche players start coming together.

The 50/50 lists are part of Spend Matters Almanac, a directory of more than 500 providers that offers deep insights on the players in the procurement technology market. Listen to the Europe 50/50 webinar here, and the U.S. version here.

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