Author Archives: Spend Matters Analyst Team



Procurement Technology, Consulting Pricing Trends and Negotiation Strategies – The Times They Are a-Changin’ (Part 1)

Editor's note: This is a refresh of our 2012 series on solution provider pricing trends and negotiation strategies, which originally ran on Spend Matters PRO.

This 4-part series will provide a look at software provider and management consulting pricing trends and negotiation strategies within the procurement and operations area. It provides insight to buying organizations that may be helpful in negotiating with vendors such as Ariba, SAP, Oracle, Emptoris, Zycus and others, as well as recommendations for how best to engage with consultancies for price and value in the current environment.

So You Want to Build a P2P Marketplace? An Introduction to Unique B2B Technology, Platform and Application Requirements

Procure-to-pay (P2P) solutions do not just have to take the form of “vanilla” cloud/SaaS applications. Increasingly, organizations are becoming aware of the power of B2B marketplace models and platform-as-a-service (PaaS) models, which can enable greater flexibility to configure P2P capabilities for a combination of internal and third-party users — and in certain cases, to leverage the buying, distribution, payment / financing (in the case of banks), and supply chain assets of the marketplace sponsor to create entirely new business models through the use of technology.

In many ways, this is the realization of the vision of the original B2B marketplaces from two decades ago (e.g., Commerce One MarketSite, i2 TradeMatrix, Ariba/Tradex, Atlas Commerce, etc.), but with technology that can support the complex requirements involved in many-to-many and multi-tier collaboration models, as well as integration approaches that go beyond standard API calls.

This is B2B nirvana for procurement and supply chain geeks like us who have lived through multiple cycles of marketplace enthusiasm (madness?). The fact that a number of vendors exist today that can service these models effectively is testament to just how far technology has come in recent years. This includes not only the usual P2P best-of-breed subjects supporting these models (e.g., Basware, Coupa, Ivalua, SAP, Tradeshift, etc.) but also names you might not be familiar with as well.

This Spend Matters PRO brief provides an introduction to the types of platform and functional capabilities necessary for organizations considering building a marketplace model or leveraging an existing PaaS application ecosystem to go outside the box of standard P2P process models and operating models for internal use only.

Leveraging Spend Matters’ experience in managing the technology selection processes for marketplace initiatives and our SolutionMap vendor RFI requirements, our analysis introduces a range of platform and application requirements that companies should consider when evaluating solutions that can power the requirements of marketplace models for B2B relationships beyond the standard requirements expected of P2P solutions.

These include core platform components, data schema, data management, workflow, personalization, supplier portal, supplier information management, analytics, globalization and related requirements.

Elevated Resources: What Makes It Great (Temp Staffing/VMS SolutionMap Analysis)

ELEVATE VMS — a product of Elevated Resources Inc., a contingent workforce services provider — is something of a new kid on the block in the evolving contingent workforce and services (CW/S) enterprise technology solution market. So it’s likely that few practitioners have heard of this VMS. But that’s because ELEVATE was not typically marketed as a technology solution separate from the Elevated Resources MSP and other service offerings.

This changed in early 2019 when Elevated Resources experienced a large increase in interest and demand for the ELEVATE VMS solution apart from the company’s service offerings. So while ELEVATE is a new face in the VMS solution market, it is actually a sophisticated technology platform and SaaS application that has been developed over a period of years within Elevated Resources.

Right out of the blocks, ELEVATE’s target market is almost exclusively mid-size organizations with $1 million to $100 million in contingent workforce spend. Today, it is true that ELEVATE might not stand up competitively to a top-tier VMS for the use case of, say, a 50,000-employee organization operating in 25 countries. But it can very well stand up as a robust, truly cost-effective solution for midsize organizations with a predominant presence in the U.S. (though the solution’s geographic footprint is being expanded). In addition, ELEVATE VMS has the experience and know-how of Elevated Resources standing behind it; and in the Spend Matters SolutionMap, the company has achieved outstanding client survey scores.

Spend Matters breaks down the broadening and evolving CW/S enterprise technology solution market into three main categories. Those are solutions to manage:

* Temp Staffing, the primary historical focus and largest category of spend under management for established VMS providers (e.g., Beeline, Coupa-DCR Contingent Workforce, SAP Fieldglass, etc.)
* Contract Services/SOW (Statement of Work), the spend category now contributing the highest growth to VMS providers’ spend under management.
* Direct Sourcing of Workforce/Services (DSW/S), while the largest volume of spend under management and numbers of users lie in the Temp Staffing solution category, top VMS providers have been evolving and increasingly providing capabilities to enable clients to directly source and engage contingent workers and manage the corresponding spend and risk.

At the time of our Q3 2019 Solution Map RFI submission, ELEVATE provided solution capabilities for temporary staffing to a handful of clients (these have been validated through client references). While Elevated Resources was able to demo a substantial range of SOW management capabilities, the rollout of that part of the solution was early stage and no client references were submitted. Therefore, for the Q3 SolutionMap, ELEVATE was only evaluated in the Temp Staffing category.

So where does Elevated Resources and its VMS fit into the burgeoning CW/S solution market? As of Q3 2019, the Spend Matters vendor ranking system, SolutionMap, contains functional and customer satisfaction benchmarks on more than 50 providers within the overall procurement technology landscape, including 14 providers within the CW/S segment. But where does Elevated Resources stand out most and help “set the bar” for the Temp Staffing segment? And why should this matter for procurement and HR organizations? Let’s delve into the SolutionMap benchmark to find out where Elevated Resources is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Workday: Procurement Rising? 5 Scenarios Explored

Procurement is taking on increased importance for Workday’s growth. In a recent Seeking Alpha column highlighting some of the takeaways from Workday’s financial analyst day at its Workday Rising customer conference, the author notes that Workday suggested it will have four drivers of sustained growth in the quarters and years to come: international expansion, financials, old customers — and, drumroll please, procurement!

According to the column, the focus on procurement appears in part driven out of the success of Coupa, which validates the “the considerable potential in this market.” Further, according to Workday, “procurement would serve to expand focus, with the potential to sell the product on a standalone basis in the future. Workday shared that more than 650 WDAY customers used procurement and highlighted that the attach rates for procurement is 85% for the core financials segment.”

Of course that says nothing for the breadth, depth and capability of what Workday is building for customers at this stage in the area (right now, things look somewhat bare bones). Cynically, we could argue that Workday Procurement is still two-steps removed from the mainstage. After all, the product line appears to fold into the supply chain product line, which does not even get a mention as one of the Product Strategy and Vision Keynotes at Workday Rising.

Procurement also takes a backseat role at other cloud-based ERP vendors as well ...

Coupa’s ‘Below the Enterprise Level’ Secret Sauce (Part 1: Dissecting What Makes It Attractive for SMB and Middle Market Procurement)

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The use of procurement technology in the middle market is heating up. For the purposes of this analysis, we define the middle market as companies between $250 million to $2 billion in revenue. Under that threshold are true SMBs. And above that range are enterprise customers, at least by Spend Matters’ definition.

Granted, this is not a perfect segmentation as the level of needs (and sophistication) in the middle market can vary dramatically by geography, industry and company, all of which can lead to very different technology buying requirements. Some middle firms may end up looking exactly like enterprise-level (Global 2000) customers, whereas others may more closely approximate SMB buyers.

Regardless, within the somewhat flexible bounds of the middle market definition, Coupa, among others, is clearly gaining traction based on a rare combination of ingredients that create a particularly attractive suite within this market segment. These features are also attractive to SMBs too. Coupa has provided information to Spend Matters that its mid-market segment is companies from $250 million to $1 billion in annual revenue and their corporate segment is under $250 million in annual revenue.

This Spend Matters PRO research brief dissects some of the elements that we think contribute to Coupa’s particular attractiveness in this sector (Hint: Very few of these elements are focused on the classic “feature/function” arms race between vendors). In a subsequent brief, we’ll attempt to quantify the importance of the middle market to Coupa in recent wins. And we will explore how some of these elements also apply to other vendors that are succeeding in the middle market as well (with mini case studies featuring Amazon Business, Negotiatus, Procurify, Scout, Tealbook and Tipalti).

VectorVMS: What Makes It Great (Temp Staffing/VMS SolutionMap Analysis)

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VectorVMS, previously known as PeopleFluent, delivers software and services that support businesses in the management of their contingent workforce programs.

Acquired by publicly traded Learning Technologies Group (LTG) in 2018, VectorVMS now operates as a separate business unit focused on providing contingent workforce and services (CW/S) technology solutions. VectorVMS' clients today are using its technology solution that enables organizations’ sourcing and management staffing suppliers and temp workers.

VectorVMS offers businesses what may be a unique blend of (i) solid Temp Staffing sourcing /management functionality, (ii) established domain expertise and experience and, last but not least, (iii) a set of a la carte services that (for internally managed programs, for example), can even substitute for some processes that MSPs traditionally offer. It therefore holds a unique place in Spend Matter’s SolutionMap lineup.

Spend Matters segments the evolving CW/S enterprise technology solution market into Temp Staffing and two other main categories:
* Temp Staffing (Temp), the historical focus and largest category of spend under management for established VMS providers (e.g. Beeline, Coupa-DCR Contingent Workforce, SAP Fieldglass, etc.)
* Contracted Services/SOW (SOW), the spend on services provided by organized suppliers (e.g., professional services, etc.), the sprawling category of spend now contributing the highest growth to some VMS providers’ spend under management.
* Direct Sourcing of Workforce/Services (DSW/S), the spend on directly-sourced individual external workers and very-small-scale services providers, a category of spend that is becoming more relevant to many businesses.

At the time of the Q3 2019 Solution Map RFI submission, VectorVMS reported providing temporary staffing solution capabilities to nearly 200 clients in various private sector verticals (such as healthcare) as well as government. While VectorVMS did demo an appreciable set of capabilities addressing Complex Services/SOW, it is not represented in that SolutionMap this quarter (but may be in a subsequent quarters).

The Spend Matters SolutionMap contains functional and customer satisfaction benchmarks on more than 50 technology providers within the broad procurement solution landscape, including 14 providers within the CW/S segment. But where does VectorVMS stand out most and help “set the bar” for the Temp Staffing solution segment? And why should this matter for procurement and HR organizations? Let’s delve into the SolutionMap benchmark to find out where VectorVMS is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Procurement Consulting Analysis: A review of KPMG’s procurement systems/technology practice

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KPMG is a noted procurement solutions and technology consultancy, with a large, mature and experienced global practice for systems integration (SI). It has developed working relationships with a range of technology firms, including Coupa, Ivalua, SAP Ariba, Oracle and most recently GEP. It has hundreds of customer deployments under its belt.

This Spend Matters PRO analysis provides background on KPMG’s systems integration/technology practice in the procurement solutions market. It includes facts and figures, like a list of how many people at KPMG are trained to implement each tech firm’s solution. But, primarily, this PRO analysis highlights the voice and experience of KPMG’s clients. We also offer data-driven recommendations and analysis for organizations considering KPMG as a systems implementation and consulting partner.

This report is based on extensive primary research by our Spend Matters team and from our SolutionMap’s customer reference process, where real-life customers share their vendor experiences and help us rank vendors. Spend Matters surveyed a range of KPMG clients in Q2 and Q3 2019, collecting qualitative and quantitative insights from organizations that had gone through implementations, change management, transformation and related initiatives as part of procurement technology deployments. KPMG also provided facts and figures about its practice directly to Spend Matters.

APEX Analytix: What Makes It Great (Supplier Relationship Management and Risk SolutionMap Analysis)

In a market facing increasing consolidation each year, APEX Analytix stands out as a best-of-breed provider that excels in areas where suite providers merely meet the benchmark (or fall below it).

Results from Spend Matters’ SolutionMap vividly illustrate the gaps in the category of Supplier Relationship Management and Risk. While some larger providers post strong scores in general supplier information management, on-boarding or platform-related SXM capabilities (e.g., workflow management), few deliver the same consistently benchmark-topping scores that APEX Analytix does in its specialty areas.

The Greensboro, North Carolina-based provider has long been known for its broader portfolio of recovery audit, overpayment and self-audit software. But where APEX Analytix leads with its specialized supplier management solution — especially with granular supplier information and risk management capabilities — makes clear that specialization can yield considerable functional depth where end-to-end solutions sacrifice in pursuit of breadth.

Where does the provider stand out most, and why should this matter for procurement and finance organizations? Let’s delve into the SolutionMap benchmark to find out where APEX Analytix is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark, and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Ivalua: What Makes It Great (Supplier Relationship Management and Risk SolutionMap Analysis)

Having reached “unicorn” status as of May 2019, Ivalua is no longer a vendor that needs thorough introduction. In fact, the solution provider with European roots now has almost 50% of its the customers and employees based in North America and is likely one of the fastest growing privately held source-to-pay procurement suites in the market.

This is thanks in large part to its engineering approach: Its entire suite was built in-house on a single platform over the last 19 years, placing it in a small group of providers that offer an end-to-end solution on a single technology stack. And the benefits of this philosophy are perhaps nowhere better illustrated than in Ivalua’s supplier management capabilities, which because of the platform’s common data model can capture, manage and integrate not only core supplier information but also the entire lifecycle of supplier activity from a truly 360-degree perspective.

As of Q2 2019, the Spend Matters SolutionMap contains functional and customer satisfaction benchmarks on more than 50 providers within the procurement technology landscape. But where does Ivalua stand out most and help “set the bar” in supplier management, and why should this matter for procurement and finance organizations?

Let’s delve into the SolutionMap benchmark to find out where Ivalua is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

‘Future 5’ award: Spend Matters names 5 standout procurement technology start-ups

To highlight the most exciting procurement technology start-up companies in the world, Spend Matters is releasing its “Future 5” listing today in conjunction with the Digital Procurement World conference in Amsterdam.

The procurement technology analyst and media firm Spend Matters is well-known to recognize 100 procurement vendors in the industry each spring through its “50 Procurement Providers to Watch” and “50 Procurement Providers to Know” lists.

Given the speed with which many procurement technology start-ups move from early-stage to market contenders, the Spend Matters team decided to issue this mid-year Future 5 listing of exciting players.

Q3 2019 SolutionMap Release Notes: Sourcing, Spend & Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management and Strategic Procurement Technology Suites

This Spend Matters SolutionMap Insider research note provides insight into the Q3 2019 SolutionMap release for Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, and Strategic Procurement Technologies Suite SolutionMap areas, reviewing the process we follow and highlighting what has changed since the last release.

Within the individual areas covered in this brief, the following providers have been added to the Q3 2019 release:

— K2 Sourcing is a new participant in the Sourcing SolutionMap category.
— Orpheus is a new participant in the Spend & Procurement Analytics SolutionMap category.

Wax Digital has added a new category to its existing participation this quarter: Supplier Relationship Management and Risk.

In addition, 38 new or refreshed customer references (and 76 individual map references) were added in the Strategic Procurement Technology areas for Q3 2019.

The following providers still did not update their scoring based on the new Q2 2019 RFI and, as a result, had their scores adjusted based on a common shift factor (that preserves positional integrity relative to peers) and any platform updates, or lack thereof, that the analysts have received since the last time the RFIs were filled out. We expect most of them to participate in upcoming Q4 2019 or Q1 2020 releases.

In Source-to-Pay:
— SAP Ariba, Jaggaer (Indirect, Advantage, and Direct)*

In stand-alone Sourcing:
— Keelvar and Scout RFP

In stand-alone Spend and Procurement Analytics:
— Opera BIQ

In stand-alone Supplier Relationship Management and Risk:
— Aravo and Sourcemap

* As Jaggaer has unified three of its product lines — Jaggaer Indirect, Jaggaer Direct and Jaggaer Advantage — into Jaggaer One, which allows customers and prospects to select the best modules from each offering to fit an organization’s unique needs, Spend Matters has broken out the naming convention for the Jaggaer offerings more specifically for Q3 2019 SolutionMap in the persona ranking graphics as follows:

— Jaggaer One is Jaggaer Sourcing, Jaggaer Supplier Management, Jaggaer Spend Analytics, Jaggaer Contracts+, and Jaggaer eProcurement, and corresponds to what was formerly Jaggaer Indirect.
— Jaggaer One+ is Jaggaer Sourcing+, Jaggaer Supplier Management+, Jaggaer Analytics+, and Jaggaer Contracts, and corresponds to what was formerly Jaggaer Advantage.
— Jaggaer One Direct is Jaggaer Direct Sourcing and Jaggaer Direct Supplier Management and corresponds to what was formerly Jaggaer Direct.

Please note: as none of the Jaggaer solutions have yet been evaluated against Q2 2019 RFI requirements by the Spend Matters analyst team, they are not able to appear in this quarter’s editions of the Provider Scoring Summaries. Please refer to the Q1 editions for their latest scoring.

This SolutionMap Insider research note provides insight into the methodology and additional changes in the Q3 2019 SolutionMap release.

(SolutionMap Insider members: access the Q3 Provider Scoring Summary reports right here.)

Q3 2019 SolutionMap Release Notes: Contingent Workforce & Services (CW/S) Enterprise Technology Solutions — Temp Staffing, Contract Services/Statement of Work (SOW), Direct Sourcing of Workforce/Services

Q3 2019 marks the fifth research cycle for Spend Matters’ Contingent Workforce & Services (CW/S) “enterprise technology” SolutionMap, the sourcing and management of three underlying spend categories: Temp Staffing, Contract Services/Statement of Work and Direct Sourcing of Workforce/Services (formerly Independent Contract Workers, or ICW).

Beginning in Q3, Spend Matters has changed the name of the Independent Contract Workers (ICW) category to Direct Sourcing of Workforce/Services, primarily to express the proper scope of the category’s coverage of those solution providers that enterprises use to source and manage both workers and small services firms in a relatively direct manner. (At the very least, a traditional supplier’s role is more limited and the technology solution enables more direct sourcing and talent management by an end-client.)

The full list of providers in the Q3 2019 CW/S SolutionMap includes:

  • Beeline
  • Coupa
  • Elevated Resources
  • Field Nation
  • Shiftgig
  • Shortlist
  • SirionLabs
  • TalentNet
  • Talmix
  • TalonFMS
  • Upwork Enterprise
  • VectorVMS
  • Vndly
  • WorkMarket (ADP)
Three new providers joined SolutionMap in Q3 for the first time:
  • Elevated Resources — participating in the Temp Staffing category
  • Shiftgig — participating in the Direct Sourcing of Workforce/Services category
  • VectorVMS — participating in the Temp Staffing category
As noted further below, a vendor may participate in a SolutionMap category but may not necessarily appear on the SolutionMap comparative quadrant graphic.

Given Spend Matters’ procurement orientation, we evaluate “enterprise technology” vendors within a source-to-pay (S2P) reference model. In other words, we look at vendors in terms of their capabilities that address some or all enterprise requirements that arise within an S2P lifecycle (i.e., from supplier sourcing to worker or supplier payment).

We have gathered extensive business profile information, have more than 100 active customer survey references and have assigned scores to specific solution capabilities (RFI line items) ranging from well over 100 to about 300, depending upon how many SolutionMap categories a particular vendor participated in.