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The 3 most common ‘surprises’ in post-merger technology integration — and how to avoid them

integration surprise

In the enterprise technology space, no acquisition comes without challenges. The key question for technology and product leaders is whether they know about those challenges before closing a deal.

In a shocking number of cases, however, vendors elect not to engage outside experts to conduct deep technology diligence. Or even if they do, the diligence is frequently surface level, performed merely as a “check the box” activity on the way to a speedy deal. As a result, multiple “unpleasant surprises” can arise over the course of post-merger integration projects. The number and severity of these surprises can lead to, at minimum, delays in expected roadmap delivery or, at worst, customer attrition due to lagging innovation, strained support levels and unkept promises.

In this Spend Matters PRO series, we’re outlining the most common potholes and hidden sinkholes that technology providers encounter in post-acquisition technology integration. Because without foreknowledge, acquisition dreams quickly morph into maintenance nightmares from which vendors may never wake up. And we want you to have a chance of getting it right.

For vendors getting up to speed on post-merger integration strategy, consider reviewing our earlier briefs, where we defined five specific stages of post-merger technology integration, as well as our follow-on brief about perhaps the most important upfront integration planning question (to maintain or not to maintain?). See:

The Contingent Workforce and Services (CW/S) Insiders’ Hot List: March 2021

Welcome to the March 2021 edition of Spend Matters Insiders’ Hot List, a monthly look at the contingent workforce and services (CW/S) space. For those new to this Spend Matters PRO column, each edition covers the month’s important or interesting technology and innovation developments in the CW/S space.

Our last Hot List for February 2021 covered a range of developments, including the Beeline and Brightfield guided-buying collaboration, Globality’s integration with SAP Fieldglass, WillHire’s industrial staffing solution, and much more.

March has shown that CW/S technology and innovation are blooming, and the overall landscape is being gradually altered. From inside formal contingent workforce programs, this may not be visible. Therefore, it’s good to step outside every once in a while, take in the scenery and smell the roses.

So let’s see what was going on in March 2021.

Payable Strategies for the Long Tail Suppliers — Stage 3: Addressing Operational Challenges Early

In this Spend Matters PRO series, you have been tasked with a mandate from your CFO to find a way to offer early pay finance to ALL suppliers and create a “win/win” with your supply base. The previous two parts of the series looked at how to assess your current situation, the spend funnel and introduced several techniques.

In the third part of our series, we will look at some of the key operations issues that impact early pay finance offerings.

Today, many large businesses may be running several early pay finance techniques targeted at different supplier segments. Each of these techniques comes complete with their own set of technology and operational components, and can include virtual cards, marketplace auctions, third-party payable finance and dynamic discounting. Companies may be looking to expand programs regionally, or simplify their current offering, or have a mandate from the CFO to find a way to offer early pay finance to ALL suppliers.

For this series, here are the five stages for tackling your payables strategy:

Let’s jump into the details for Stage 3.

In the course of our discussions with treasurers, we found six operational areas that challenge the rollout of any type of early pay program.

Payable Strategies for the Long Tail Suppliers — Stage 2: Understanding Addressable Spend & Early Pay Options

In this five-part Spend Matters PRO series, we will explore how businesses can approach paying suppliers early given the business’s current baseline and legacy situation. Today, we focus on understanding addressable spend and the various early pay options.

For this series, here are the five stages for tackling your payables strategy:

  • Stage 1 — Assessing Your Current Situation
  • Stage 2 — Understanding Addressable Spend & Early Pay Options
  • Stage 3 — Addressing Operational Challenges Early
  • Stage 4 — Selection Process and Key Issues to Address
  • Stage 5 — Getting to a Decision

Let’s jump into the details for Stage 2.

A post-merger technology integration handbook: To maintain or not to maintain?

After an M&A event, technology integration provides a significant opportunity to create the proverbial 1+1=3 product and solution synergies that the transactions are often founded on. Yet all too often, integration planning (and execution) comes up short. Part of the problem is that while vendors may sometimes say solutions are truly integrated to customers and prospects after a period of time, there are no standard definitions as to what integration actually means.

In a previous Spend Matters PRO series covering this topic, we attempted to remedy this by defining five specific stages of post-merger technology integration, especially from a technology-buyer perspective, given the relative ease with which a buyer could be confused or accidentally misled.

See:

Today, we continue our analysis with a research brief of particular note for technology vendors — especially technology and product leaders — who are going through or considering bringing different technology stacks together, especially where there is product overlap. We explore the different options available for bringing disparate technologies together, and the importance of making often-challenging decisions as quickly as possible.

Let’s begin.

The Contingent Workforce and Services (CW/S) Insiders’ Hot List: February 2021

Welcome to the February 2021 edition of Spend Matters Insiders’ Hot List, a monthly look at the contingent workforce and services (CW/S) space. For those new to this Spend Matters PRO column, each edition covers the month’s important or interesting technology and innovation developments in the CW/S space.

In February, coronavirus infections in the US dropped significantly, people are getting vaccinated, but we’d all like to see production, distribution and points of service working like a well-oiled supply chain.

Heading into 2021, the CW/S industry continues to advance with technology being a significant impetus. In fact, it seems that pandemic conditions have been a boon to many CW/S technology solution providers. One news items explores if LinkedIn will go head-to-head with Fiverr and Upwork

Also, as the economic recovery hopefully continues to accelerate, businesses will be figuring out how to manage their total employee and non-employee workforces and the mix of third-party services. And that will impact how technology will be used and what will be required of solution providers.

So let’s see what else was going on this month.

Complex services are complicated — What’s procurement to do? (Part 1)

Spend on services by US-based organizations is estimated to be over $10 trillion. Contingent workforce (the engagement of temp workers and individual contractors) represents only a small fraction of total services spend. External spend in the other complex services categories (e.g., marketing, facilities management, IT, BPO, etc.) is vast, and it is complicated.

Numerous problems adhere to the (perhaps unrealistic) aspiration to holistically source and manage complex services across an enterprise. But even if that aspiration is set aside, effective sourcing and management of complex services categories remains complicated and challenging, and it can appear daunting to procurement professionals. At the same time, many of these professionals are aware of their organizations’ shortcomings in process and technology and the missed opportunities to achieve savings and other benefits.

But is the road to sourcing and managing complex services just a dead end and not worth traveling?

We don’t think so, if the matter is approached realistically. Rather than embarking on an unplanned trip around the world in an old car, taking some limited well-planned excursions with just the right vehicle may be the way to go.

For this reason, Spend Matters is pursuing research into the opaque world of sourcing and managing complex services with technology (beyond the now highly visible contingent workforce category). Shedding light on how complex services are or can/could be sourced and managed with existing and new technology will be a stepwise process, but the research should help practitioners to achieve greenfield cost savings and performance improvement in various services categories.

As a first major step in this direction, we have launched a buy-side survey of how technology is used to source and manage complex services; buy-side practitioners can take the survey here and obtain survey results down the line.

In this PRO analysis, we look at procurement’s challenge in improving management of complex services at a high level. In Part 1, we provide an overview of complex services categories, what makes them different and what process framework applies. In Part 2, we will review the state of supporting technology solutions and suggest different ways to frame and overcome shortcomings and challenges.

What’s behind the investment in Globality’s services sourcing solution?

Globality provides a procurement technology solution that uses AI to enable organizations to source complex services across multiple categories. At organizations across all industry verticals, services comprise, on average, 50%-60% of external spend. Most of these services categories are not well or comprehensively managed, and purpose-built technology solutions have been scarce.

Globality recently completed a $138 million Series E round from Sienna Capital, a wholly owned subsidiary of Groupe Bruxelles Lambert, and Softbank Vision Fund, bringing the company’s total funding to $310 million since its inception in 2015. This funding will support the company’s continued growth, including go-to-market and client-facing activities and, of course, product development, including user experience design (UX), industry vertical expansion, spend category additions, internationalization, etc.

To understand what is driving this investment, it is helpful to look back and examine Globality’s development as a business and its strategic momentum over the past 1-2 years. We were able to catch-up with Globality’s Chief Revenue Officer, Keith Hausmann and review what’s been happening at Globality and where it is headed.

The Contingent Workforce and Services (CW/S) Insiders’ Hot List: January 2021

Welcome to the January 2021 edition of Spend Matters Insiders’ Hot List, a monthly look at the contingent workforce and services (CW/S) space. For those new to the Hot List, each edition covers the month’s important or interesting CW/S technology and innovation developments.

Our last publication was a Special Edition — Hot List, published at the end of December 2020. It covered developments that occurred in December; it also provided an overview of all Hot List coverage over the course of 2020. The December 2020 developments included PRO Unlimited’s launch of RatePoint; Globality’s new SAP Ariba connector extensions; Turing.com’s $32 million Series B Round; Facebook’s possible entry into the contingent workforce space; the launch of gig worker neobank Unit Financial and its $18.6 million funding round; and more.

Turning to January, welcome to 2021. We’ve started the year in the midst of a surge in Covid-19 infections, the beginning of vaccinations, an attack on the US Capitol and the inauguration of a new US president. With lots of gears changing in the US and across the world, the CW/S space seemed to continue its moderate pace of new developments driven by or related to technology. How the industry will respond to these and new changes over the course of 2021 remains to be seen. So for now, let’s focus on what was happening in the first month of the year.

Accounts Payables Automation update (Part 2) —  Re-evaluating e-pro, supplier enablement, invoicing, payments, financing, analytics

Analytics

As Spend Matters re-evaluates the AP automation sector’s technology developments, Part 2 of this PRO analyst series will focus on the six key elements of AP automation that we evaluate for our SolutionMap’s scoring and ranking of vendor offerings. (Don't read this without reading Part 1, about re-evaluating the tech developments in AP automation.)

We saw these six areas change in 2020, so we’ll look at how the function is evolving. This post explores the technological, functional and document-level components required to automate the AP function, and it mentions the stakeholders involved.

There are likely use cases that require much more technology, or much less, than what we mention here. So give us your feedback.

In Part 3, we’ll discuss the market landscape for AP automation providers.

Accounts Payables Automation update (Part 1) — Re-evaluating the sector’s technology developments

Accounts payables is a business process with great operational workload that needs to be handled with great efficiency and effectiveness. If not done well, it might generate significant additional costs to the business and add risks like business fraud or damage commercial relationships with suppliers — all of which harm a company’s bottom line.

Although the pain points of the accounts payable process are the same today as in the past, the importance of its automation has become greater recently as businesses look for more value creation than just operational efficiencies. And that counts even more so with the arrival of COVID-19, which has shaken up the status quo of all companies’ processes.

Today, procurement technology providers have been funded with millions of dollars to create better solutions to automate this process and improve AP’s integration with other business processes, like procurement (2- and 3-way match), accounting (reconciliation), and treasury (cash flow optimization).

New technologies and the development of advanced solutions have made it possible for many more companies to have access to AP automation solutions that were previously unthinkable for an SME, and for large and global companies. Examples include the cloud, API integrations, artificial intelligence, RPA, digital payments, data extraction solutions, etc.

Therefore a year ago, we at Spend Matters started with a new SolutionMap category that compares AP Automation offerings.

However, the evolution of the AP automation solutions in 2020, and the sector’s push to include other business processes, has led us to rethink the approach we take toward the AP automation function and how we'll analyze it in 2021.

In this three-part Spend Matters PRO series, we will explain what we are seeing in the AP automation market, the components of our analytical approach and the state of the AP automation solution market.

The Contingent Workforce and Services (CW/S) Insiders’ Hot List: December 2020 ‘Special Edition’

Spend Matters has been publishing the monthly CW/S Insiders Hot List — our monthly look at new technology and innovation in the contingent workforce and services (CW/S) space — since the start of 2018. Today we are publishing this “Special Edition” to mark a change in our publishing schedule and look back at the key trends and themes that emerged over the course of this year.

For nearly three years, we have published the Hot List at the beginning of every month and covering developments of the previous month. As such, the November Hot List would cover the developments that transpired in October. To align titles and converge periods, starting next month, the January Hot List will be published at the end of January and will cover the developments that took place in January. We will maintain that convention going forward.

In this December 2020 Special Edition, we will also be looking at and discussing some of the key trends that the Hot List covered over the months of 2020. But before turning to that discussion, we will provide a summary round-up of notable events/developments in December.