Author Archives: Nick Heinzmann



Ivalua: Vendor Analysis (Part 3) — Downstream Solution Overview

supplier network

Ivalua has been growing steadily since Spend Matters’ comprehensive update in 2016, with the suite provider adding clients, offices, employees and capability around the globe. After we provided an updated background in Part 1, we delved into Ivalua’s primary upstream solution components around spend analysis, strategic sourcing, direct sourcing and contract management in Part 2.

Today, this seven-part Spend Matters PRO series will continue our solution overview with a look at the downstream components — namely catalog management, e-procurement and order management, e-invoicing, expense management, payment management and IVA for guided buying. After we review these downstream components, we’ll finish up our solution review with a couple of the cross-platform capabilities around risk and performance management, supplier information management and master data management (MDM). After we finish with our solution overview, in Parts 4 and 5, we will dive into Ivalua's particular strengths and weaknesses from a solution perspective.

Ivalua: Vendor Analysis (Part 2) — Upstream Solution Overview

gig economy

In Part 1 of Spend Matters' seven-part PRO series, we provided an updated background on Ivalua, which has been growing steadily since our last Vendor Snapshot in 2016, adding clients, offices, employees, customers and capability around the globe. No longer the Rodney Dangerfield of procurement, Ivalua is finally getting some real respect, having just reached unicorn valuation status in its last funding round.

There are a number of reasons for this, some of which revolve around services and global support capability, and others that revolve around its extensive solution platform. The latter is the subject of our articles today and tomorrow, where we will overview all of the major components, starting with the upstream ones today. Then, after we review the downstream components in Part 3, we will dive into Ivalua's particular strengths and weaknesses from a solution perspective in Parts 4 and 5.

Procuring outcomes, without limits: 3 takeaways from Upwork’s 2019 Work Without Limits summit

Much like in other spend areas, the contingent workforce and services (CW/S) mega category is being shaped by disruptive forces from multiple angles. The oft-cited talent gap is a major motivator, as businesses look in vain for missing skills — everywhere from IT to operations and even more creative fields like marketing. But also influential are broader economic trends, including the rising importance of business partnering to tap collaborative innovation and the digital transformation of just about every major industry.

The result is a gradual but quickening shift in the CW/S world away from finding placeholders for siloed FTEs toward a workforce and talent strategy focused on outcomes — whether that be training a new set of algorithms for a key software platform, translation and localization for a business’ flagship product, or a set of social media-optimized advertising to bring a major brand in front of a different audience.

This shifting mindset was on prominent display last week at Upwork’s third annual Work Without Limits Executive Summit, held for the first time in Chicago. Here are three takeaways from the event.

Digital Business Strategy: The CPO’s Outside-In Agenda (Part 3)

In the first two installments of this Spend Matters PRO series (see Part 1A, Part 1B), we noted that a number of pressing issues are shaping procurement from the outside in, yet chief procurement officers (CPOs) are still primarily concerned with issues set by an inside-out agenda — that is, cost-cutting and supply assurance targets mandated by upper management. Our PESTLE analysis of factors shaping the modern CPO agenda identified broad trends like economic instability, globalization, changing digital business strategies and the need to address corporate social responsibility (CSR) as areas that procurement organizations need to consider if they want to truly tap and manage the opportunities (and risks) offered by external supply markets, starting with sustainability and CSR in Part 2A and Part 2B.

Today we move on to the second item topping the CPO’s outside-in agenda: digital transformation.

Digital transformation is increasingly creeping into a CPO's crosshairs because digitization is becoming a daily part of our personal and professional lives. Not only is software becoming critical for everyone in the organization to do their jobs, but the internet is becoming critical to sales and marketing to advertise and sell the product as well as to R&D to do research and engineering to control just-in-time manufacturing. Meanwhile, from a corporate strategy perspective, companies are aggressively looking at their digital business strategies — and consulting firms like Accenture, Deloitte, McKinsey and others are busy capitalizing on this. Distribution companies do not want to get “Amazoned.” (For example, Accenture is looking to next generation digital technologies to achieve it’s ZBx nirvana — and achieve sustainable zero-based spend in a zero-based supply chain.) Logistics firms do not want to get “Ubered.” Contract manufacturers want to become innovation incubators. And pretty much every finished goods manufacturer wants to embed telemetry to collect data and use it to improve customer satisfaction, increase top-line growth and pass the data back to the supply chain to improve operational efficiency.

Digitization is the new buzzword and just about every publication out there is talking about it, running articles on how to do it, and publishing “deep” exposes on the benefits of digitization. Best practice guides, case studies, futurist projections, and other in-depth studies are a daily occurence. Not all are equal, not all are relevant to your organization, and not all are even accurate. But that’s beside the point. Digitization is here, and its influence is only going to grow. So rather than sit back like a luddite and bemoan the coming wave of pink slips due to automation, CPOs need to rally their organizations around digital to help them see the benefits new technologies can bring (as tactical process cost reductions can always be invested in strategic value generation efforts if they use these same technologies to make the case, a case that does not necessitate a reduction in workforce, just a shift from the tactical to the strategic).

Ivalua: Vendor Analysis (Part 1) — Background

FM Global Resilience Index

A lot has changed since Spend Matters’ last full snapshot on Ivalua in December 2016, when we said (with apologies to the late comic) that Ivalua was the Rodney Dangerfield of procurement suites in terms of not getting any respect. At the time, we clearly noted that “if we add up the differentiated combination of its architecture/platform, industry enablement, functional/modular capability (across the source-to-pay continuum), analytics and ‘overlay’ process support capabilities, the sum of the Ivalua package stands out from all others in a true ‘deadpan’ way — albeit with no laughing involved. In short: Ivalua deserves much more respect than it gets from a market that is typically less familiar with it compared to larger peers.”

Since then, Ivalua has raised two massive rounds of capital, the first in April 2017 when it raised $70 million from private equity firm KKR (to build a war chest to accelerate R&D, expand its global footprint, triple down on marketing and make strategic acquisitions), and the second funding round just a couple of months ago when it raised another $60 million and achieved “unicorn” status. Now it's the envy of its peers, and we know for a fact that the other big players — Coupa, Jaggaer, Oracle, GEP and SAP Ariba — have taken notice.

But before we put the cart before the horse (or, in this case, the analyst’s conclusions before the background and solution overview), we're going to back up and start at the beginning now that you have an idea of what's to come.

Ivalua is one of the few source-to-pay (S2P) providers that has built its end-to-end solution on a single technology stack from the ground up, and one of the fewer still that doesn't try to grow through an acquire-and-integrate approach (like SAP Ariba, Jaggaer and even Coupa), or replatforming (like Determine or Oracle), but rather, develops its own native stack (as has GEP, Zycus, and mostly Coupa). Furthermore, it's also one of the few that has enough depth and breadth across each core area to enable it to serve as a single technology S2P suite for the procurement organization. That should not be a surprise given that the firm has been building this platform in-house on a single stack for the past 19 years while working with a global customer base.

This is important because there comes a point when the overall procurement organization performance beyond sourcing-identified savings and P2P-catalog compliance relies on a single extensible platform approach that goes beyond just functional enablement within procurement. Plus, if you want real automation/RPA, guided procurement and real AI someday — you’ll really want a single-workflow-driven platform that works on a single data store, because no advanced technology works without a sufficient amount of good, clean, harmonized data.

This revised, seven-part Spend Matters PRO snapshot provides facts and expert analysis to help procurement organizations make informed decisions based on Ivalua's source-to-pay capability, its suitability for specific industry segments, its global service and support footprint, and how each of these stacks up to its competition. (Hint: Ivalua is second in four out of five Source-to-Pay and Strategic Procurement Technology SolutionMap rankings, and second in two out of five P2P maps — namely the Nimble and Configurator personas — in terms of analyst score in the 2019 Q2 SolutionMap release.)

Part 1 of our updated vendor snapshot provides a company background and a summary recommended fit suggestion for when organizations might want to consider Ivalua in the procurement technology arena. Parts 2 and 3 provide a detailed solution overview. Part 4 will dive into the strengths, and Part 5 looks into the weaknesses across the product line. Part 6 will provide commentary and a SWOT analysis, and Part 7 will provide a comparative market overview and final summary analysis.

GoProcure: Vendor Analysis (Part 2 — Product Strengths and Weaknesses, SWOT and Selection Checklist)

In our last Spend Matters PRO brief, we introduced you to GoProcure, a four-year-old provider based out of Duluth, Georgia, that is deploying a B2B marketplace and platform for tail-spend management. Bringing together basic RFQ and requisitioning tools, a marketplace for procuring goods and services, and complementary services like a buying desk, GoProcure is positioning itself as capable of covering the full range of tail spend in a market where most vendors address some but not all of the tail. And while its coverage is not necessarily exhaustive, GoProcure’s current iteration does encompass a lot of capabilities — albeit in a bit of a fragmented manner. Whether it’s a fit for a procurement organization’s unique challenges and needs, however, will come down to how exactly one conceives and chooses to tackle the tail.

Part 1 of this brief provided some background on GoProcure and an overview of its offering. In Part 2, we provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis and a short selection requirements checklist that outlines the typical company for which GoProcure might be a good fit. We also give some final conclusions and takeaways.

GoProcure: Vendor Analysis (Part 1 — Background and Solution Overview)

The question of how procurement organizations can best address the long tail of spend is still an open one, with multiple vendors offering their own flavor of the optimal tail-spend “solution.” For some, tackling the 80% of spend that is opaque and unmanaged is a matter of applying RFQ tools and automation to quickly bring dark purchasing into the light. (Recently profiled Fairmarkit is one example of this.) For others, a patchwork approach is the right fit, extending currently used P2P suites into the long-tail territory via punchout and integration methods. (Coupa’s combination strategy of using Aquiire’s web agent technology to crawl the internet as if it were a virtual catalog while also offering direct integration of Amazon Business content into e-procurement search results is one prominent example.)

Yet alongside these technology-first models another option is emerging. Some vendors are combining the possibilities of RFQ and catalog management tools with a BPO-lite, providing a combination of technology and services somewhat analogous to a managed services provider (MSP) for tail spend. (Chicago and Dubai-based Simfoni, which we cover in our SolutionMap for Spend and Procurement Analytics, is a notable example with a range of tail spend-specific tools.) The intended result is to capture the full range of tail purchases by creating routes for everyday users to easily request or source needed lower-value goods and services from suppliers that are not strategically managed while capturing the exceptions through the optional service layer. For more insights on how these tail-spend management approaches are all competing (and converging), see our tail spend management research study report here.

This multi-pronged approach is the strategy behind GoProcure, a four-year-old vendor out of Duluth, Georgia. GoProcure bills itself as a B2B e-commerce platform for all-in-one tail-spend management. Combining basic RFQ and requisitioning tools with a marketplace for procuring both goods and services, along with complementary services like a buying desk, GoProcure is positioning itself as capable of covering the full range of tail spend in a market where most vendors address some but not all of the tail, allowing it to claim procurement organizations at Global 2000, mid-market and private equity portfolio companies as clients.

This Spend Matters PRO Vendor Introduction offers a candid take on GoProcure and its capabilities. The two-part series includes an overview of GoProcure’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Prodigo Solutions Vendor Introduction: Analysis, SWOT, Checklist (Part 2 — Product Strengths and Weaknesses)

locum tenens

In our last Spend Matters PRO brief, we introduced you to Prodigo, an 11-year-old provider based near Pittsburgh that is deploying a platform that’s specific to healthcare procurement and contract management. With 20% of the U.S.’s largest integrated delivery networks (IDNs) and more than 30% of Gartner’s top hospital supply chain departments as customers, Prodigo has numerous use cases and a large pile of healthcare-related data on which it has built a strong core product. And although it is not always best-in-class when compared against leading P2P providers that lack a vertical focus, Prodigo’s willingness to target the needs of a specific market have led to some commendable product strengths as well.

Part 1 of this brief provided background on the company and an overview of Prodigo’s offering. In Part 2, we provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, a short selection requirements checklist that outlines the typical company for which Prodigo might be a good fit, and some final conclusions and takeaways.

Prodigo Solutions: Vendor Analysis (Part 1 — Background and Solution Overview)

healthcare

Rogue spend is a common problem for procurement in all industries, but in healthcare the issue is on a whole other level. Whereas the typical organization can see about 30% of indirect spend that falls into the off-contract category, that number can climb to as much as 60%.

There are multiple factors that drive these rogue purchases. Notably, in healthcare the distinction between direct and indirect spend is less of an issue than the difference between clinical spend (that is directly related to patient care) and non-clinical spend. These categories are managed a little differently from how procurement organizations typically approach direct and indirect purchases. Internal demand for clinical items can vary significantly, and since not having an item in inventory could be a matter of life and death, the need to spot buy specific medical devices or materials isn’t analogous to an ad hoc spot buy that you might find for many indirect spend categories.

Healthcare spend is also nuanced because the requestors — the medical personnel — often have a stronger say in what is purchased and to what degree cost is a factor than procurement gets compared with other verticals. This includes “physician preference items” where a physician MUST have a certain medical device/instrument that is different than the hospital system standard (and hopefully not because the MD is getting wined and dined by the manufacturer or distributor!).

This industry dynamic applies to the healthcare supply markets, as well, where unique features and quirks, including a much higher use of group purchasing organizations (GPOs) and strong influences by medical device manufacturers over how their products are priced and used within hospitals, only further complicate procurement efforts to bring spending under control. Over 90% of GPO revenue is from supplier-funded “administrative fees” (i.e., rebates that are exempted from federal government kickback regulations), and until this commercial model goes away, hospitals still need to automate them (including percentages of those fees shared back with the hospital) and other supply chain requirements such as distributor owned/managed inventory within the system.

These healthcare-specific challenges are well-known to Prodigo Solutions, a purchasing technology solutions company based in the suburbs of Pittsburgh, Pennsylvania. Originally grown out of the UPMC’s needs for better managing its own internal purchases, Prodigo today operates as a standalone software provider, offering tools that support e-procurement with healthcare-specific controls and post-signature contract management and compliance. Its customers include both integrated delivery networks (IDNs) and small community hospitals alike, and its healthcare marketplace currently facilitates transaction volumes in excess of $15 billion.

This two-part Spend Matters PRO Vendor Introduction series offers a candid take on Prodigo and its capabilities. It will include an overview of Prodigo’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis, and a selection requirements checklist for companies that might consider the provider.

ConnXus Brings ‘Quick and Clean’ Supplier Data Cleansing to the Masses with SmartScrub: Vendor Analysis Update

For the majority of procurement organizations today, obtaining and maintaining accurate supplier master data is a huge pain point. Most organizations still do not trust their vendor master as a single source of truth (or even have one!) — nor do they have the time or personnel to continuously validate and enrich supplier records to the degree that is necessary to create that level of trust.

One solution to this problem for the last decade or so has been to gather a list of suppliers the organization has worked with in the past year and submit the records to one of several firms that clean and enrich this data as a service for various purposes (e.g., deduplication, verification, enrichment, etc.). Among these firms is ConnXus, a best-of-breed solution provider within the Supplier Relationship Management & Risk SolutionMap category. ConnXus is best known for strong supplier diversity management and a growing set of adjacent capabilities (such as a next-generation supplier network where a supplier can register once and share its profile with any business).

As technology has improved in the market, new options for supplier master data cleansing and enrichment have turned this service into an increasingly automated process (e.g., doing so via API every time a new supplier is added). But offerings vary. Some require a license to the entire platform to use the data services, while others provide a cost-effective entry point that do not guarantee perfect results. So ConnXus, as of this week, is seeking to provide a middle ground between these two extremes: A competitively priced supplier data cleansing and enrichment subscription called SmartScrub that guarantees 98% accurate records for U.S.-based businesses returned in under 24 hours — often much faster, as the service is completely automated once users provide an uploaded template containing supplier name and valid address.

More important for procurement organizations, SmartScrub’s capabilities are available for purchase without engaging ConnXus’ supplier management solutions. And at the price points ConnXus is offering, most companies will have the ability to validate, centralize and report on diversity and industry data for thousands of records where before such solutions may have been inaccessible. Although ConnXus does aim to turn these subscribers into full customers, of course, especially as it quickly evolves its data validation capabilities into what it sees as the next logical evolution: mass supplier discovery of diverse and industry-specific vendors.

This Spend Matter Vendor Snapshot Update reviews ConnXus’ new SmartScrub subscription and explains how the supplier management vendor is taking a potentially disruptive approach to enabling MDM cleansing and virtualization. It is an addendum to our previous reviews and analyses of ConnXus:

Part 1: Background and Solution Overview
Part 2: Product Strengths and Weaknesses
Part 3: Commentary and Summary Analysis
ConnXus Envisions a Next-Generation Supplier Network With myConnXion: Vendor Snapshot Update

What Puts the ‘U’ in Coupa? Look to the FAANG Playbook on Usability

Rare is the presentation where a Coupa employee fails to reference the acronymic meaning of the company’s name. We heard this numerous times at Coupa Inspire 2019 this week in Las Vegas, and while few these days would confuse the Palo Alto cafe with the unicorn software provider, I have to admit the repeated messaging on the name has clearly sunk in with customers.

Case in point, over multiple conversations at Inspire, customers have frequently referred to the “U” — usability — as a key reason why they either signed with Coupa or have remained a client.

Mastercard Track: A Gateway to a New Kind of B2B Ecosystem (Part 2) — SWOT Analysis and Market Implications

Over a decade ago, American Express led the payments way in making innovative investments aimed at procurement organizations and their suppliers, primarily through its venture and partnership arms. (Remember MarketMile/Ketera, anyone?) But more recently, it appears that Mastercard has picked up the B2B innovation mantle, opting to organically build a solution aimed at buyers and suppliers with procurement front and center in the business case crosshairs. This new solution, Track, surprised us in multiple ways (click here for an introduction to Track), especially for its audacious supplier network vision (and we might add also for what it is not doing, at least not yet).

Is the tail of Mastercard’s new supplier network offering — comprised of a trade directory, supply risk monitoring capability and payment ledger — wagging the payments dog? The answer might surprise you. This purebred procurement solution can hunt without even hinting at the need to enable a virtual or corporate card swipe.

Indeed, with its new Track solution, Mastercard appears quite serious about the procurement and supplier management market beyond just finding creative ways of leveraging its rails to enable payments. With this new product release, Mastercard stands in contrast to American Express, among others, which still appears to be taking the same old B2B payments and financing pooch out for a walk, albeit with an updated veneer for the digital working capital era.

But before we drown in our doggy metaphors, let’s analyze what’s good — and what’s not so good — about Mastercard’s first generation Track release and what it means for procurement organizations, supporting services providers (e.g., consultancies) and the procurement technology sector as a whole.