The needs of each procurement organization — as well as procurement-solution providers’ organizations — are too nuanced for “one size fits all”-style rankings and recommendations from other industry intelligence firms and experts. That’s why Spend Matters ranks procurement and supply chain software providers through the prism of buying personas. With the Q3 2019 SolutionMap released today, let's revisit why this is an essential approach to the procurement technology market.
This Q3 2019 SolutionMap analyzes a select group of strategic procurement technology suite providers (inclusive of spend analytics, sourcing, supplier management and contract lifecycle management).
Spend Matters today released its Q3 2019 SolutionMap, ranking 56 procurement software companies across 12 solution categories, including E-Procurement, Sourcing, Spend Analytics, Supplier Relationship Management, Contract Lifecycle Management and Contingent Workforce & Services. Click on this article to see which new providers joined the rankings, and to see how to access rankings for free!
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.)
This Spend Matters SolutionMap Insider release note provides insight into the Q3 2019 SolutionMap release for Source-to-Pay, reviewing the process that we followed for this quarter’s release.
The providers in the Q3 2019 Source-to-Pay SolutionMap include Coupa, Determine, GEP, Ivalua, SynerTrade and Zycus. All of these providers were required to participate in SolutionMap for each underlying module, as well. These individual areas include Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, E-Procurement and Invoice-to-Pay. All of these providers are also included in the individual Strategic Procurement Technologies (SPT) and Procure-to-Pay (P2P) suite views.
SAP Ariba did not update their scoring 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 them to participate in upcoming releases.
The Source-to-Pay customer data set is composed of a subset of the 831 individual organization references included in the overall SolutionMap scoring as of Q3 2019*.
This SolutionMap Insider research note provides insight into the nature of the expanded RFI, methodology, customer references and additional changes in the Q3 2019 SolutionMap release.
(SolutionMap Insider members: access the Q3 Provider Scoring Summary reports right here.)
*Customers using more than one module that a vendor provides can opt to fill out a single survey within each individual suite area (e.g., a customer using two modules for P2P and four modules for SPT would need to fill out only two surveys).
The Spend Matters SolutionMap Contract Lifecycle Management (CLM): Provider Scoring Summary is only available to SolutionMap Members. This SolutionMap analyzes a select group of Contract Lifecycle Management (CLM) providers. It is part of our Q3 2019 SolutionMap report series, also featuring spend analytics, sourcing, supplier management (including supplier information management, performance management and risk management), e-procurement and invoice-to-pay providers.
Do you ever feel like you’ve been winning the battles but still losing the war? In the art of war, military strategists are required to look beyond short-term skirmishes, where little if any ground is gained, and instead focus on a vision for victory in the longer term. That doesn’t mean suddenly pulling your forces from the front or ignoring enemy advances but has more to do with creating a better line of sight between the guys in the trenches and the generals in the tents.
Joonas Jantunen, Cloudia’s CEO for the Middle East, sees a similar distinction to be made in today’s business procurement wars. Every large procurement function aspires to be strategic, but most are running their operations on short-term tactics.
Strategic sourcing, in contrast, sets out to align all sourcing practices with an organization’s long-term business objectives, with a view to creating new and sustainable value.
This week’s SolutionMap Customer Insights report focuses on customer reviews for Exari, a provider of contract lifecycle management (CLM) solutions that was acquired by Coupa this year. The applicable SolutionMap category for this report is in CLM.
SolutionMap Insider members can read about Exari in our latest report. The customer feedback was given before the acquisition was announced in April. In each Customer Insights report, we provide a one-page summary from the SolutionMap peer review process. The summary includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.
This week’s SolutionMap Customer Insights report focuses on customer reviews for Icertis, a top provider of cloud-based, enterprise contract lifecycle management (CLM) software. The applicable SolutionMap category for this report is in CLM.
SolutionMap Insider members can read about Icertis in our latest report. In each Customer Insights report, we provide a one-page summary of information gleaned from the SolutionMap peer review process. The summary includes ratings on how well the vendor meets user expectations, three key differentiators for the vendor and a list of quotes about the vendor’s greatest strengths.
Cost-savings and strategic advantages hide in every business, and the latest procurement technology can reveal how to find it — in your contracts. In our recent article about spend management, we focused on the flood of spend data that businesses face and the technology that can help make sense of that.
But that technology, like artificial intelligence, is also being used to connect contract data and accounts payable information. That connection offers insights into novel ways to think about contracts that can add profits to the bottom line.
Contracts represent a direct link to suppliers, and that can offer profitable information about supplier activity that can help with contract renewals, a common way to control spend and find savings. But with AI, it gives your business the advantage and reduces risk.
In our last installment of this CVM series, we highlighted a graphical framework to depict how commercial value management is about extending CLM into a more commercially enabling role in all enterprise areas where contracts (and value promises) are stored.
In this next installment of this series, we’ll highlight these areas and how to unlock some of that value for the benefit of the firm — and procurement.
Let’s briefly look at some of these areas to see how extending contract management to broader CVM approach is a practical way for procurement to get aligned with other areas (and with itself).
Let’s start this piece with a question: How are high-flying SaaS providers measured?
Answer: Growth (hopefully profitable) through repeatable subscription-based revenue.
And what are those subscriptions? Contracts.
The enterprise value of these companies, like others, is based on the promise of future cash flows that are increasingly built upon a portfolio of contracts. Want to maximize enterprise value (like the CEO)? Better get good at managing contracts! This is not in the way that your legal department might think of contracts, but rather in a business sense that maximizes commercial value within those contracts that will add up to enterprise value.
Put another way: If chief procurement officers want to move from “chief spend officers” to “chief value officers,” they’re going to need better strategies and tools to do value management.
“Value management” is the highest level of procurement’s evolution in a framework that I developed in my previous life leading procurement research at The Hackett Group.
The problem is that while there are great tools for spend management, when you start going broader into demand (and multi-tier supply) and deeper into financial value flow beyond single-tier cash disbursements to suppliers, the technology requirements aren’t yet well supported by existing tools and vendors.
In Part 1 of this Spend Matters PRO series on commercial value management (CVM), we highlighted the fact that contract management systems are morphing from legal documents focused on transferring risk onto your trading partners, and toward systems that model all B2B commercial (and even non-commercial) promises with trading partners, regulators and even just internal stakeholders. The financially related “promises” or “commitments” are really obligations/rights that can be viewed as liabilities/assets. And these aren’t just ledger entries to close the books for regulators, but rather living, breathing promises made up and down the supply chain to deliver value to customers — at a lowest total cost of course!
Unfortunately, this chain of value doesn’t exactly flow across the fragmented landscape of systems out there. It’s hard enough to see contracted revenue & cost/spend flows in the direct materials supply chain where only a few advanced firms can stitch together some semblance of integrated business planning that brings in multi-tier supply-aware cost modeling and contracting (e.g., buy-sell arrangements for volatile commodities). Now, consider the services supply chain and an XaaS world where omni-channel value chains need to merge products and services.
For example, think about the mind-numbing complexity of field services operations where customer warranties (contracts) and service levels (contracts) need to be translated to supply fulfillment that can include leased equipment (w/ contracts), outsourced transportation services (and contracts), third-party contractors (directly contracted or via a service provider with its own contract), and even outsourcing providers (with BIG complex contracts) who might run the whole shebang for you. These contracts, sub-contracts, MSAs, SOWs, POs (a contract), etc. all have information in them related to direct committed revenue and costs/spend, but also hints at potential spend and business risk depending on what’s in (or not in) those contracts.
But, if you’re a CFO trying to manage your spending (“Spend” with a big “S” and not just supplier spend with a small “s”) and see both types of spending in terms of:
* Tying spend to revenue to understand profitability
* Seeing and shaping spend and resource commitments before they occur
* Cash flow implications of that spend
* Category and supplier views to maximize value from supplier spending
* Spend volatility based on price risk, volume risk, competitive risk and other supply risk factors like geo-political risk (e.g., trade wars) and regulatory risk (e.g. data privacy)
* Projects that drive this spending (e.g., in project-intensive industries)
* Drivers of this spend that are hidden (e.g., IT/telecom contracts of all forms)
* Legal spend (internal and external) to manage all of these contracts!
The problem is that you don’t have a single system to see all this. You have a G/L to close the books and maybe a planning-and-budgeting application rather than the “financial control tower” (go ahead and trademark that — it’s available) that you’d love to have something like an EVA/ROIC-type model that drives all the way down to the atomic contracts and execution systems. And if you’re good, you have a CPO with a single spend database and contract repository.
But, let’s face it, even for those firms with this, the contract is still usually a document artifact to refer to and not a dynamic system with complex pricing modeling and linkages to dozens of execution systems in the field that are REALLY governing the commercial aspects of operations. All you likely have in your contract repository is a field called “contract value.” And even in the simplest case, and even with the most modern S2P application suite, you’re likely matching supplier invoices to POs with payment terms that aren’t likely staying synched with the original contract.
So, contract data and associated CLM systems must transcend their legal artifact role and even move beyond the level of contract clause libraries and associate basic clause metadata. They need to go much deeper into the business realm (and not just the legal department realm) and be able to model and manage commercial data much more deeply. Doing this requires improved systems that manage what we call commercial value management — which is about commercial lifecycle management rather than contract lifecycle management. “Spend Management” is great, but spend is what you pay, and value is what you get. So you need to be really clear on who gets how much of what, under what conditions, and what happens if they don’t!
We spent a fair amount of time in our last PRO series installment that dove into the specific elements of CVM. In this second SpendMatters PRO series installment, we’ll dive primarily into the buy-side aspects of this topic and discuss how procurement organizations — and procurement’s functional peers in finance, IT, legal, GRC, SCM, sales and HR (and any related CoE combinations) — can use contracts as commercial data hubs to better support not just basic buy-side CLM within a source-to-pay context, but also how to use it to better connect procurement with these internal partners to help them manage spend/suppliers in their functions individually and also collectively with each other — and out to external stakeholders.
We’ll also highlight a few areas where CVM support emanating from a next-gen CLM platform can likely disrupt a few existing niche markets within and outside of the procurement realm.