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Where the intake management market is heading

12/13/2023 By

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Along with generative AI, the intake management market has been this year’s primary discussion among procurement practitioners and software providers. Not only has Zip, which productized and popularized intake, reached a $1.5 billion valuation, but an array of intake- and/or orchestration-focused competitors have emerged to address similar use cases.

If you have questions such as: What is intake? What is orchestration? What is the difference between these areas, and which vendors are most notable? Then please see our intake management mini-series, published this summer, which addresses these concerns and more.

Indeed, a market that did not really exist just a few years ago is now the fastest-growing segment in procurement tech. Intake has resonated with organizations of all industries and sizes, which has led to two notable developments.

Market expansion

First, there has been an influx of new vendors that explicitly address intake management or orchestration. The common element of these solutions is a simple and intuitive user interface with very customizable, no-code workflows to drive adoption. Since intake and orchestration exist to make management of everyday processes easier, it is natural for these solutions to focus on simple UI and end-user adoption.

Second, legacy vendors that do not offer the above form of intake management have scrambled to repackage existing features as ‘intake.’ While technically accurate — intake in a nutshell is simply the initiation (and often subsequent tracking/workflow) of a request — the UX of a source-to-pay (S2P) suite’s intake is typically not as user-friendly or modern as that of a specialist. Moreover, intake from these vendors tends to skew toward purchase requisitions and procure-to-pay rather than more holistic intake management.

Intake covers anything that involves stakeholder engagement, such as the creation of a contract, sourcing event, new supplier, etc. But to date, such intake in a S2P suite, even when marketed as intake management, is usually just filling out an inherently limited ‘smart’ form and then following a workflow that, while configurable, is not drag-and-drop or no-code. Additionally, in-platform messaging and collaboration are typically stronger on more modern, intake-focused providers.

The pivot from suites to acknowledge and, in some cases, emulate intake management is not the only ripple effect of intake’s rise. Providers that focus on orchestration or procurement performance management (which tends to support orchestration more than pure intake), such as Focal Point, have also either added features or improved existing capabilities to support the intake process.

Since these solutions already existed for centralization and cross-functional process improvement purposes, the addition or expansion of intake capabilities is both more natural and more likely to succeed. This is because the popularity of intake is not just due to solution functionalities, but also to user adoption (as a result of configurable solutions with modern UIs/UXs). As a result, solutions that already were built with these traits in mind can more smoothly support intake.

Intake’s relationship with S2P

However, perhaps the most interesting development on the intake management market is the differences in vendors’ visions. For example, Zip has expanded from its initial ‘intake-to-procure’ position to ‘intake-to-pay’ and now also natively supports sourcing as well as some facets of contract management.

One could argue that traditional S2P includes the steps of ‘intake-to-pay,’ considering the intake (even if not productized) of purchase requisitions, sourcing requests, etc. However, Zip’s ‘intake-to-pay’ framing emphasizes the outward, stakeholder-first and broader (beyond purchase requisitions/sourcing) lens that the procurement-focused S2P solutions did not overtly include. This has helped recast procurement departments, which were once seen as ‘paper movers,’ as more integrated business partners.

Another reason Zip’s direction is striking is that the original (and for some Zip customers, ongoing) solution use case was/is solely to centralize requests and customize workflows while increasing communication between stakeholders. Of course, this will always be supported. But Zip’s direction is markedly different from that of ORO Labs, Omnea, Tonkean, Opstream, etc. While these providers differ, their short-term focuses are largely on improving intake/orchestration-related processes rather than expanding to natively support S2P processes.

How intake-focused solutions can differentiate

Of course, this brings up another question. If the bevy of intake specialists are all devoted to the intake, orchestration and workflows themselves, how will they differentiate themselves from each other? One possible answer is that the market for intake management will be (or already is) large enough that, much like traditional S2P, there is a place for all of these vendors and more. This would be especially true if they continue to expand into different geographies, specialize in particular verticals, focus on services, etc.

Another idea relates to the power of these providers’ underlying platforms. The creation of a user-friendly, intuitive front end for intake is only one piece of the puzzle. The strength of different platforms to support more advanced use cases like spend analysis, tighter integrations that go beyond data (and extend to documents, for instance) and so on will allow users to get more out of their investments in specific solutions.

This also extends to AI and generative AI features. Most intake providers either already have developed or are in the process of developing some sort of chatbot or other generative AI capability. Eventually, it will become commonplace for a provider to offer some sort of chatbot plugin that routes users to appropriate areas, assists with initiating processes, provides general help, etc.

Therefore, where vendors may differ in this regard is in the underlying large language models (LLMs) that power their chatbots. For example, a procurement-specific model that understands subtle nuances for different types of demands, creates workflows based purely from text, etc. would add value than a more generic chatbot leveraging OpenAI that has only been minimally tweaked to optimize procurement-/intake-related scenarios.

In the long run and beyond workflows, this could also enable providers to achieve true no-code status; LLMs could use an organization’s procedures, guidelines, past purchases, technical documentation, etc. to create ad-hoc processes for each request and effectively ‘code’ the proper message (XML, etc.) to send the request to subsequent applications via integration by creating a technical message in the right format based on its integration knowledge.

Additionally, the application of AI to intake management can help with more proactive forecasting. This would be especially useful for large organizations that use an intake solution across several departments. Using historical data, a system may be able to predict the amount of particular requests and the associated time needed for different stakeholders to address them over a given period. This could enable organizations to be better prepared for future requests. These features would also provide value in other areas, such as a solution suggesting or implementing enhancements to existing workflows if the AI determines a regular bottleneck or inefficiency.

Is it the intake, simplicity or both?

Providers like Zip that strive to build native S2P functionalities within modern, easy-to-use intake management solutions may also pursue some of these routes. However, Zip is strategically betting on its rapid growth being not just driven by the market’s need for intake, but also on the simplicity and usability of Zip itself. In other words, it is already clear that intake management was a missing piece from the procurement software market — but the overcomplication and lack of configurability of dominant solutions were also major issues for many organizations.

If Zip is correct that it was not just intake but also the usability of its solution that led to its rise, then the market will also be quick to adopt its S2P capabilities (which, from an analyst perspective, have largely been a pleasant surprise in terms of depth and use cases considering the emphasis on simplicity). And should this trend continue, then many of Zip’s competitors will eventually add their own native functionalities to not only complement but also compete against existing S2P solutions.

Whether intake providers directly challenge S2P suites and point solutions is a long-term consideration. For now, it is clear that intake management has become its own, distinct segment in the market. Legacy providers will continue to offer less user-friendly but functional intake modules, but the intake specialists that prioritize ease of use and configurability will appeal more to most organizations. Over the next few years, it will be interesting to watch exactly how these specialists develop, both in terms of differentiation from an intake lens and in potential exploration of native S2P functionalities.

We will be covering Intake Management and Orchestration in depth with a themed quarter starting Q2 2024. In the meantime, and especially for non-subscribers to our Insider analysis, please subscribe to our weekly newsletter to keep up with procurement tech developments.

And you can read our Analyst Eye (and more) for further thoughts on Intake with a free Spend Matters account.