ERP Content

This Spend Matters Nexus research brief explores the potential competitive impact of the Medius and Wax Digital combination on the procurement and ERP vendor landscape. It also explores the strategies that some providers within these groups are already pursuing (or may pursue) in response to customer requirements, competitive pressures and the desire to expand the overall total addressable market for integrated procurement and finance solutions.

Procurement technology vendors and ERPs targeting procurement compete in a catch-all market segment that can make an area like CRM or human capital management (HCM) seem simple by comparison. From sourcing to contract management to supplier management (and all of its sub-disciplines) to e-procurement to analytics (and beyond) for all types of spend — indirect, direct, services, tail, etc. — the various components of procurement technology are as diverse as the specialist, suite and ERP vendors targeting the market.

Vendors covered in this analysis include Corcentric, Coupa, Infor, Jaggaer, Microsoft, Epicor, GEP, Ivalua, Netsuite (Oracle), Oracle, Proactis, Sage, Synertrade, SAP, Unit4 and Zycus.



If you are just coming up to speed on the Wax Digital-Medius combination, start here with this Nexus series — (Part 1: Company Backgrounds, Product Strengths/Weaknesses, Deal Rationale), (Part 2: Wax strengths, customers, integration considerations), and (Part 3: Strategy and competitive landscape analysis for AP automation and invoice-to-pay). Free Spend Matters’ news coverage of the deal can be found here and here.

Jason Busch serves as Managing Director of Spend Matters Nexus, a research and advisory group that works with sponsors, CEOs and boards on due diligence, M&A strategy and product strategy. Spend Matters and Spend Matters Nexus are owned by Azul Partners. Disclosure: Azul Partners served as an adviser to Marlin Equity in the Wax-Medius transaction.

Yesterday, the finance and HR solutions provider Workday announced it was buying Scout RFP, an easy-to-use sourcing solution. You can find previous free coverage on the transaction on Spend Matters here and here. In our first Nexus subscriber brief covering the procurement technology sector’s M&A news, we offered background on Scout, explored the provider’s strengths and weaknesses, and gave our initial insights into the rationale for the transaction.

As we continue our analysis on Spend Matters Nexus, we turn our attention to landscape implications of the transaction that may affect other technology providers. Today’s research brief provides a competitive analysis for the ERP market segment including providers such as Epicor, Infor, Oracle, Microsoft, Netsuite (Oracle), SAP, Sage and Unit4.

In this analysis, we also provide context via a brief history lesson on how (and why) ERP providers have traditionally offered procurement capability as an extension of financials, tracing the emergence of ERP from MRP. Specifically, we trace how and why this legacy has led to a situation of technology that is inadequate for procurement’s needs (which gave rise to the source-to-pay technology market in the first place).

Purchasing is a core part of any business. That means software that can address the whole purchasing value chain and integrate closely with key areas of an organization is a real bonus for companies looking to expand their operational flexibility with suppliers. Applications such as supplier relationship management (SRM) provide the answer, limiting non-value-added work, offering real-time insight and playing a key role in helping companies come to grips with purchasing in a complicated, unstable global market.

The broader procurement technology market has always had a tenuous relationship with the direct procurement technology solutions. Old timers may remember SupplyWorks from the early 2000s, but it folded — and the SupplyWorks brand name now belongs to a janitorial/sanitation service provider (we won’t go down the easy joke paths on this one). More recently, DirectWorks, a perfectly decent solution for direct materials sourcing, also struggled until getting picked up by Ivalua.

Part of the challenge is that direct procurement is not only a subset of spend but also a superset of processes, because it’s essentially infused into the broader supply chain. This makes it addressable from multiple solution sectors like SCM apps, supply chain networks, integration players and industry players.

Source-to-pay application suites, for their part, are picking off some low-hanging fruit functionality here, but the broader requirements are spelled out well in our coverage of a distinct segment that may be forming for direct materials procurement solutions.

Manufacturers today are slowly seeing an expanding set of purchasing tools beyond ERP and MRP alone, and choice is generally a good thing if you have your overall solution strategy/approach nailed down before you go tool shopping. Many will be more than happy to explore this new market.

One of these newer choices is SourceDay, an Austin, Texas-based vendor that directly integrates with ERP and MRP systems to automate the management of purchase orders and supplier performance. By providing a more usable and procurement-centric layer over the data housed by a legacy ERP or supply chain application, SourceDay takes on many of the problems that procurement organizations find in managing direct materials spend.

The result is that procurement can save time, reduce errors and systematically manage supplier performance from a common cloud or mobile interface while still claiming the benefits that an ERP system can offer. There are obviously caveats to this statement — namely around integration — but we’ll touch on this later.

This Spend Matters PRO Vendor Introduction offers a candid take on SourceDay and its capabilities. The brief includes an overview of SourceDay’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.

It’s time to truly write off the ERP past with two of the top ERP providers.

SAP Ariba has doubled-down not only on core capability packaged approaches to accelerate adoption — and in the case of SAP Ariba, performs at the top of many of the SolutionMap functional rankings — but also next generation technology. For example, artificial intelligence to guide users down specific paths. Moreover, SAP Ariba is one of the top performing procurement technology suite vendors overall in SolutionMap.

And Oracle, with its investments in Cloud/Fusion, provides one of the best Deep-persona Procure-to-Pay (E-Procurement + Invoice-to-Pay) functional solutions in the market based on the latest SolutionMap benchmark — at least for companies also migrating their Oracle back-end to Cloud financials. Its platform-level investments in AI, blockchain and other areas are real — and are showing up in use cases that cascade across supply chain, finance and purchasing. The solution has capabilities for geeks and pragmatists alike.

When you find yourself tasked with figuring out what ERP solution you are going to on-board for your organization, you do a quick search and find there are dozens of vendors offering a variety of ERP solutions. Where do you start in your process of determining which of these vendors and platforms would be best for you? You need to look at functionality, pricing and resourcing.

Usability is proving the single most important killer app for the next wave of sourcing technology adoption. And providers such as Bonfire are proving that absolute feature/function capability alone is less important than providing an optimally rich user and customer experience that will maximize adoption and customer satisfaction.

This is not a new strategy. Bonfire is in fact following Coupa’s playbook. As we have noted before, “such was Coupa’s first act, before it focused on investing in functional leadership to complement best-in-class usability.”

Today, Bonfire is headed down a similar path in the sourcing market. Its customer references and candid feedback from Spend Matters’ Q4 2018 Sourcing SolutionMap suggest it is not a typical provider but rather one that is redefining an entire market by focusing on customer adoption and the user experience. Like Coupa, it is creating a movement among procurement organizations.

But where and how does Bonfire stand out in this competitive technology market with customers?

As of December 2018, the Spend Matters SolutionMap contains functional and customer satisfaction benchmarks on more than 50 providers within the procurement technology landscape. But where does Bonfire stand out most and help “set the bar” in sourcing, and why should this matter for procurement and finance organizations? Let’s delve into the SolutionMap benchmark to find out where Bonfire 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.

Spend Matters welcomes this guest post from RiseNow Managing Partner Matt Stewart.

With an endless list of options in the procurement software space, how is it possible to choose between spend management solutions like Ariba, Basware, Coupa and Jaggaer? Should you even consider such options when your existing enterprise resource planning (ERP) system is capable of handling basic spend management needs?

If you’re reading this, you’ve likely considered or are considering whether best-in-class source-to-pay (S2P)/procure-to-pay (P2P) solutions are worth your time, money and effort. You’ve probably wondered how the benefits compare between the solutions, whether one far exceeds another in ROI, what is best for your end users and suppliers, and if the rate of adoption is greater with one solution over another.

This story offers a few good places to start when determining whether your ERP provider or a best-in-class spend management solution is best for your organization.

Companies in the U.S. spend hundreds of billions of dollars annually on travel and entertainment — and a study from Certify Inc., an expense report software company, surveyed executives and finance leaders to get a snapshot of how many still use manual methods versus how many have upgraded their T&E management technology. In the study, officials note that travel and entertainment costs can be a significant part of companies’ budgets, which means efficiently managing employees’ expense reports can greatly affect a company’s profits. Since 2013, the “Expense Management Trends Report: Annual T&E Outlook and Benchmarks” by Certify has worked to help companies of various sizes recognize best practices to consider in travel and entertainment reporting and as methods to benchmark such companies’ current processes against their peers.

Procurement software provider SourceDay on Wednesday announced it has received $6.5 million in Series A funding from three capital venture firms. SourceDay said it has now raised $10.8 million since the 2015 launch of its software-as-a-service cloud platform, which automates direct spend management, purchase order management and supplier collaboration. The provider integrates its solution with ERP systems to reduce manual operations for suppliers and buyers, the statement said. The Austin, Texas-based company plans to focus on product development as well as expand its sales and marketing activity, it said.

As the industrial internet of things (IoT) integration grows more complex and the cost of broad-based IoT integration and monitoring continues to fall, businesses are becoming aware of the limitations of their enterprise software in making use of IoT data, a survey finds. IoT involves the monitoring of all aspects of manufacturing or a business by imbedding monitors in things like components, production lines or fleets of vehicles, so it’s easy to see how they would create a flood of data. IFS North America, a business software provider who commissioned the study with researcher IEN and analyzed the results, asked 200 IoT decision makers across a range of industries how well their software facilitated IoT data integration in 2017 and 2018. The results show a decline in confidence.

Spend Matters welcomes this guest post from Doug Hudgeon, a business automation expert.

P2P software is painful to buy and painful to implement. In order to get the biggest benefit, you need to rip the purchasing spinal cord out of your company and replace it with an end-to-end P2P system. This is a big project, requires a big budget and, if you are going to deliver on the promised benefits, you must have an unwavering commitment to change. Sales cycles are long but, fortunately for P2P vendors, the margins on the deals that do get across the line can be pretty good. But the competitive landscape is about to shift.