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Intake and Orchestration in procurement: How do the solution providers define its role? – Zip

06/06/2024 By

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Spend Matters continues its focus on Intake and Orchestration as this quarter’s theme of special interest with a viewpoint on the importance of this market segment from Nick Heinzmann, Head of Research at e-procurement and intake management specialist, Zip.

Our analyst recently wrote that it was Zip which “productized and popularized intake,” and that today, for something that did not really exist a few years ago, it is the fastest-growing procurement tech market.

If you’d like to understand more about what it means for procurement, read our Guide to Intake and Orchestration here.

What was the gap in the market and the business need that Zip intended to fulfil?

“Zip was founded in order to solve the fundamental procurement challenges that face growing companies of any size — problems of adoption, compliance and maximizing value.

“Procurement is the second-largest area of business spend after payroll, and many efforts at transforming the function have fallen short of expectations. Zip’s experience building solutions is informed by the perspectives of the internal customers and stakeholders that procurement serves. Our co-founders, Rujul Zaparde and Lu Cheng, encountered these pain points firsthand when working in the product and engineering functions at Airbnb.

“After an important manager left the company, Rujul and Lu found themselves responsible for renewing a contract for a vendor critical to business. Like many employees, they had no direct knowledge of the procurement process — where to start, what steps were required, which forms or what systems needed to be utilized. This confusion led to frustration, along with the chance of risk to the business. While their teams at Airbnb needed this vendor in order to continue operations, the renewal process caused a roadblock, distracting them and others from focusing on their own work.

“This direct experience inspired the founding of Zip. When employees don’t have a single, user-friendly point of entry into the procurement process, they either evade the process entirely or push the work onto others. This transforms the role of procurement from a strategic lever of growth and savings, into a function scrambling to manage rogue spend and risk exposure. This, combined with working in clunky, inefficient and rigid legacy systems to manage procurement, causes a frustrating experience for everyone involved — certainly not up to the standards of transparency and process enhancement promised by modern technology.

“In less than four years, Zip’s pioneering Intake-to-Procure solution has addressed and solved these issues for hundreds of companies, ranging from Global 2000 enterprises to hyper-growth startups. Since its founding, Zip has helped customers save over $4.4 billion and deliver up to a 5x faster purchasing process. Our customers have rapidly adopted intake and orchestration because it provides higher levels of spend visibility across the entire purchasing process, powering data-driven decision making and cost optimizations.

“Having created the intake and orchestration market, Zip has now expanded its product offerings beyond that initial gap in the market to solve even larger challenges with our holistic Procurement Orchestration platform.”

Why does procurement (and business) need this extra layer of tech?

“Rather than looking at Intake and Procurement Orchestration as a ‘layer’ on top of existing tech, it’s important to consider the intricate but fractured web of best-of-breed tools thousands of companies use across teams and systems.

“The reason Zip is considered the foremost intake provider to have played a crucial role in driving the popularity of a market, which, according to Spend Matters is ‘the hottest and fastest-growing new market in procurement technology’ is because it weaves together the entire spending process, delivering enterprise-grade performance with consumer-grade flexibility that unlocks savings, improves process efficiencies and reduces risk for customers. Procurement orchestration is a paradigm shift in the potential of procurement to deliver value.

“Many businesses today, even those that have invested in some degree of procurement technology, are still not controlling the full extent of their spend. Many of these companies with an installed source-to-pay solution actively manage only 50%-60% of addressable spend. The remaining 30%-40% that can be influenced, or evades the process, is effectively ‘ad hoc’ spend that either should be influenced earlier or brought under contract.

“Intake and Orchestration by Zip is designed to massively increase visibility both by closing these gaps and proactively assisting by identifying areas of overspend. It also suggests opportunities to eliminate duplicate or redundant vendors, and provides insights earlier in the requesting process to enhance customer’s negotiation leverage.

“Our research demonstrates that these benefits alone can lead to tens of millions of dollars in savings annually. Snowflake, for example, leveraged Zip to achieve early visibility into $6.7 billion of approved spend, helping them save more than $300 million due to earlier spend rejection and contract renewal optimization.

“Within global enterprises with thousands of employees working across varied ERP, S2P, TPRM, CLM, ITSM, and other installed systems, the cross-functional operation of sourcing, evaluating, and onboarding vendors is an agonizingly manual process. Procurement orchestration is the best solution yet to operationalize automation and transparency into the process, reducing lapses in due diligence.

“As Zip continues to develop new products and advancements in technology, we hope organizations continue to explore how intake and orchestration can deliver hard ROI, working as a true partner to deliver long-term benefits. Though this new era of procurement is in its earliest days, we’re confident that intake and orchestration is more than just a process layer, but the most effective way to deliver continuous improvement and value from procurement at any company, at any scale.”

Analyse the vendor

Read our full analysis of Zip’s solution in this Vendor Analysis, part of our members’ subscription service.

Get help

You can engage Spend Matters to help you find your best-fit solution (including a current assessment of your organization, RFx and selection advisory).

Learn more

To know more about the technology, join our live webinar, “Demystifying Intake and Orchestration in Procurement” on June 19 at 11 a.m. ET. Our analysts will define what Intake and Orchestration technologies are, showcase use cases, and explain how investing in these technologies could benefit your business.