Author Archives: Jason Busch



About Jason Busch

Jason is the founder of Azul Partners, a B2B research and digital media firm. He currently serves as Managing Director, Spend Matters Nexus, a membership program, providing market intelligence, strategy and due diligence advisory for private equity firms and investors. It also provides insight for CEOs, boards and leadership teams covering strategy, corporate development and business development/partnership areas. For all members, Spend Matters Nexus offers invitation-only networking opportunities. Prior to Azul Partners, Jason got his on-the-job education in procurement technology working at FreeMarkets for five years in a variety of roles. Before that, he started his career in consulting and merchant banking. Jason holds undergraduate and graduate degrees from the University of Pennsylvania. Current investment disclosures: Azul Partners, Inc., Koble, Inc., Knnected Inc. (DBA SupplyHive), Public Spend Forum, LLC, Price Dynamics LLC (DBA MetalMiner Metal Price Benchmarking), Sigaria Ltd. (DBA Procurement Leaders)., Simfoni Group Ltd., Spendata LLC and Spend Matters Europe Ltd.


GEP: Vendor Snapshot (Part 7) — Competitive Landscape

This final installment of our seven-part Spend Matters PRO series on GEP will look at how it compares to its competitors, like SAP Ariba, Coupa, Ivalua, Jaggaer, Corcentric’s Determine, SynerTrade, Wax Digital and Zycus.

Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5). A SWOT analysis and commentary followed in Part 6.

GEP competes in several market segments and brings varying degrees of capability, differentiation and strength in many areas. In certain segments of the market, it is more successful in positioning an overall suite value proposition rather than individual modules (individually or together) for several reasons. Clearly, GEP “keeps coming back to suite” as its technology mantra for good reason.

For example, Spend Matters’ analysis suggests GEP is stronger within the strategic sourcing services and solution areas than in the P2P components of its suite from an “absolute” functional capability perspective. Yet the provider is effective at selling both areas together when they are equally valued. GEP has indeed won some large-scale P2P customers, replacing other solutions, based on the integrated suite value proposition.

Or consider how GEP’s e-invoicing and e-payment capabilities are part of its integrated source-to-pay (S2P) suite solution but are not yet on par with specialist solutions. As another example, GEP has a strong analytics offering but typically positions it within the context of its suite, so while it could compete against specialists in this area, given its classification capabilities, it typically does not.

In this PRO analysis, we’ll set up our coverage primarily relative to technology application segments such as:
* Fully Integrated (and some “loosely coupled”) Source-to-Pay Suites
* Full P2P Suites
* End-to-End and best-of-breed strategic procurement technology (SPT) offerings
* e-invoicing and e-payment specialists
* Supplier and master data management (MDM) providers

But, we’ll also touch on major consultancies, BPO players and niche MSPs.

GEP: Vendor Snapshot (Part 6) — SWOT and Commentary

Global Risk Management Solutions (GRMS)

For those procurement organizations that have not looked at GEP’s technology suite in recent years, they will likely be surprised when exploring its breadth of functionality, as well as the nuances associated with capabilities that differentiate it from other suites. These areas include clever takes on category management, integrated suite analytics, mobile support, and a platform-as-a-service (PaaS) and cloud-native solution built and hosted on the Microsoft Azure platform.

This sixth installment of the seven-part Spend Matters Vendor Snapshot covering GEP provides an objective SWOT analysis of the company and offers our commentary on its platform. In our next installment, we will close out with a competitive market analysis, with recommended shortlist candidates as alternative vendors to GEP, and some recommendations and provider selection guidance for companies that may consider GEP’s suite or even individual modules and capabilities. Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5).

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 3: Before the Process — Third-Party Validated Analysis and the Importance of Understanding the Strategic Buyer Landscape)

Aside from companies already owned by private equity firms, it is the rare solution provider — or any company — that is selling to private equity, going out for a later investment round or seeking a strategic buyer that has prepared adequately for the transaction process in such a way that the efforts will fully maximize the valuation, terms and other factors in its favor. That is, unless it gets lucky, and to be fair, some folks get lucky!

As expert advisers — primarily to “buyers” — we’ve seen this phenomenon play out time-and-time again in the procurement solutions universe. But it doesn’t have to continue to be that way. This series is focused on leveling the playing field for more advanced sellers of all types, gained by sharing our lessons learned from over 20 years of involvement in transactions in the sector, and especially our work as advisers to private equity investors, nearly all of which are extremely methodical and rigorous in their deal screening and due diligence processes.

So far in this Spend Matters Nexus series, we covered the initial seven tips to prepare — ideally far in advance — of the process itself (see Part 1 and Part 2). Today we continue with the next two tips to pay particular attention to in the lead-up to a process (but still ideally before it begins). And later in the series, we will explore tips to leverage in the actual process itself, ideally once you’ve fully prepared ahead of time to maximize your chances of an optimal exit, transaction or investment.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

GEP: Vendor Snapshot (Part 5) — Solution Weaknesses

In Spend Matters’ previous installment of our seven-part GEP review, we called out some of the real strengths of the SMART by GEP platform, including some that are rare in the market today. In this Part 5, we are going to balance our analysis by also pointing out some of the "weaknesses" of the platform, at least against peers. (A weakness isn't a weakness unless you are looking for, or need, a certain capability, which, of course, you may already have in-house in another platform.)

While we may have hinted at these by way of omission of coverage in our solution overview in Part 3 and Part 4, we are going to get more specific so you understand precisely what isn't there (and can make a judgment call as to whether you even need the capability). We’ll look at deep optimization (especially logistics), asset management for direct, VMS, trade financing, T&E and more.

GEP: Vendor Snapshot (Part 4) — Solution Strengths

procurement software

In Part 2 and Part 3 of Spend Matters’ seven-part review of GEP, we provided a relatively complete overview of GEP's SMART S2P solution that it takes to market and uses to power the S2P efforts of some of the largest companies in the world. And while we may have hinted at some of the stronger parts of the offering, in today's installment we are going to call out the real strengths of the platform, some of which are (relatively) unique in the market. Those strengths include analytics/master data management, strategic sourcing with expert insight, mobility, network intelligence, opportunity management and more. Let’s take a look at each.

Coupa financial results: Delving into another strong quarter

procurement

Earlier this week, Coupa reported its Q2 results for fiscal 2020, achieving revenue of over $95 million (a near 55% increase year-over-year, primarily from organic growth). The quarterly revenue performance beat analysts’ estimates, and non-GAAP EPS was also above expectations, although cash flow from operating activities declined quarter-over-quarter. Regardless, investors cheered the results, helping Coupa hit a price/sales ratio of nearly 28X in early morning trading on Thursday — and a roughly $9 billion market cap (representing over 125% appreciation in the stock price in 2019 alone).

That’s valuation perfection by just about any measure when compared to peers.

But what is happening within Coupa (and the broader market) under the surface that is driving these numbers? This Spend Matters Nexus brief provides insight on broader (and related) market trends while peeling back a few layers of the onion on what’s driving Coupa’s success, including how it is benefiting from various competitive dynamics in the market (e.g., SAP Ariba’s broader integration hurdles), as well as some of the challenges Coupa must confront to fully capitalize on its acquisitions.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

GEP: Vendor Snapshot (Part 3) — Solution Overview (Midstream and Downstream)

interest rates

As we highlighted in Part 1 of this seven-part Spend Matters PRO series, GEP is a diverse company that is a provider of source-to-pay solutions, BPO services and consulting. In Part 2, we discussed how SMART by GEP is a unified S2P solution platform built from the ground up as a cloud-based solution, with full integration capabilities into back-end systems, built and hosted on the Microsoft Azure infrastructure. From both platform-as-a-service (PaaS) and hosting perspectives, this brings the same advantages of Amazon Web Services virtualization (e.g., ability to rapidly “scale up” and “scale down” at any layer in the architecture). But further, the entire GEP platform is Microsoft native, which theoretically means tighter integration into the Microsoft ecosystem of products (e.g., SharePoint, Office, etc.) than competing products. The Azure platform and hosting model provides another layer of scalability insurance for GEP customers.

In Part 3, we’ll look at the midstream and downstream functional S2P capabilities — contract management, supplier management, procure to pay (P2P) — that GEP offers within SMART by GEP. We also take a critical look at GEP’s emphasis on user experience.

GEP: Vendor Snapshot (Part 2) — Solution Overview (Upstream)

SciQuest

SMART by GEP is a unified source-to-pay solution platform and, as GEP is quick to point out, it doesn’t sell “single modules as widgets” on a price list. SMART by GEP can, of course, provide its customers with modular functionality. (See Part 1 of this seven-part Spend Matters PRO series for a company overview of the S2P provider, which also has BPO services and consulting.) However, GEP claims that the majority of its new platform customers will continue to embrace full suite adoption from the get-go, versus a minority that will desire a point-based solution at the start.

SMART by GEP is a cloud-based solution, with full integration capabilities into back-end systems, built and hosted on the Microsoft Azure infrastructure. From both platform-as-a-service (PaaS) and hosting perspectives, this brings the same advantages of Amazon Web Services virtualization (e.g., ability to rapidly “scale up” and “scale down” at any layer in the architecture).

But further, the entire GEP platform is Microsoft native, which theoretically means tighter integration into the Microsoft ecosystem of products (e.g., SharePoint, Office, etc.) than competing products. The Azure platform and hosting model provides another layer of scalability insurance for GEP customers.

In Part 2 of this series, we will cover key upstream functional S2P capabilities — spend analysis, category management, sourcing — that GEP offers within the unified SMART by GEP platform:

Dynamic Discounting: Backdrop, Definitions, and Enablers

finance

Editor's note: This is a refresh of our 2014 series on dynamic discounting, which originally ran on Spend Matters PRO.

This Spend Matters Plus brief provides a primer on one of the timeliest topics in receivables and payables finance: dynamic discounting. Note that by receivables financing we mean the selling or other leveraging of “receivables” as an asset on a supplying organization’s balance sheet to receive early payment. By payables financing, we mean the financing of early payment by a third-party (or the buying organizations’ balance sheet).

Even this subset of trade financing is a big and complicated topic, but in this analysis, we’ll discuss how dynamic discounting can reduce risk and create greater liquidity in the supply chain. If you’re in procurement or accounts payable and are new to the topic, this brief will be a useful first step in understanding what dynamic discounting is, how it can help, and which technologies and vendors can enable it.

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 2: Before the Process — TAM and Scenario Planning)

Many solution providers’ executive teams that we have observed are not as prepared to enhance their chances of optimal private equity, investment and M&A outcomes. This Spend Matters Nexus series provides insight from the thousands of hours we have spent working with private equity groups, CEOs and boards to evaluate acquisition targets — and with sellers to optimize exit scenarios and outcomes in the procurement solution market.

In the first installment of the series, we provided five recommendations to prepare wisely for an eventual process.

Today, we continue the analysis with our next tips to consider as the actual process approaches (i.e., “pre-process” tips). These include instructive recommendations on taking the time to build a total addressable market (TAM) model and scenario planning/rehearsing the actual process itself, including how to prepare and interrogate a “data room.”

Later in the series, we will explore the deal process itself, offering tips for stewarding the effort and driving to an optimal outcome.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

GEP: Vendor Snapshot (Part 1) — Company Background

GEP, formerly Global eProcure, is an integrated source-to-pay (S2P) solution and services firm that offers managed services including full BPO capabilities, transformation services (i.e., consulting) and its own internally developed S2P technology suite. The combination of these individual capabilities from a single provider, especially as they become increasingly synergistic, makes GEP truly a standalone in the industry.

Founded in 1999, GEP has been known primarily for its deep knowledge in upstream strategic sourcing and its flexible approach to building and delivering capabilities to its paying clients. These capabilities grew organically, and perhaps somewhat opportunistically, into more repeatable technology-enabled solutions (e.g., spend analysis, e-sourcing, etc.). They also grew when they acquired (and subsequently replatformed) Enporion, a small supply chain management provider that had select upstream strategic sourcing and downstream e-procurement applications, primarily to energy, manufacturing and distribution clients. This acquisition provided GEP with an IP base to further its downstream development capability and better serve these industries.

In the early days, like many companies founded around its time, GEP was a traditional provider of hosted / ASP sourcing technology, but earlier this decade, GEP made the strategic decision to develop its own native source-to-pay cloud platform suite (“SMART by GEP,” first released in 2014), which replaced its older hosted or SaaS offerings. It was a strategic bet that procurement organizations of varying sizes want the agility and depth of a single provider that can flexibly assemble a solution of technology, managed services and transformation services to support their dynamic needs, and one that has continued to pay off. While GEP may not have as many customers as Coupa or SAP Ariba, GEP has more F500 / G2000 clients than any other provider in the S2P space, and, in fact, whereas many of its S2P competitors can count F500 customers as a minority of their customer base, for GEP it’s a majority.

The wager was prescient on many levels, and is starting to massively pay off in growth and business scale, which no one could have imagined at GEP five years ago when its SMART suite was released, and definitely not seven years ago when it would have first begun its new development effort (after the Enporion acquisition). This growth not only includes cloud-based standalone application growth outside of services, but also more transformational services around digitization and automation as well as category management and overall "procurement transformation" once new capabilities are installed. And this success is increasingly creating consternation with traditional software, solution and service providers alike, which is both a boon and a bust for GEP, as we will discuss later in this series.

This seven-part Spend Matters PRO vendor snapshot series provides facts and expert analysis to help buying organizations make informed decisions about GEP’s source-to-pay capability, as well as limited background on its associated services capability. Part 1 of our analysis provides a company background and overview to set the stage, as well as a few key differentiators to help in short-list decisions. Parts 2 and 3 will provide a detailed solution overview of each key area/module. Part 4 will dive deep into the GEP platform and solution strengths, while Part 5 will balance the analysis by diving into the GEP platform and solution weaknesses, at least with regard to other solutions on the market. (A weakness isn't a weakness if it's not a capability your organization needs, either due to its industry or the presence of that capability in another platform that is already being used.) Part 6 will provide a full SWOT analysis as well as commentary on the solution and recommended fit. Finally, Part 7 will finish up with an overview of the competitive landscape.