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Beyond Spend Influence: Enabling Procurement’s Emerging Roles in Business Transformation (Part 4) — Supply Chain / Direct Procurement (Introduction) [PRO]

In the previous installment of this Spend Matters PRO series, we dove into procurement improving its influence into indirect spending and how it can improve how the business gets more value from its spend and its “spend management” process (e.g., dovetailing into the business planning process). In this installment, we’ll turn our attention to supply management and direct procurement influence.

You might think direct procurement shouldn’t have any misalignment with the broader supply chain, given that direct procurement is itself part of the supply chain. However, supply management is not always in sync with supply chain management.

Organizations that get it right through better procurement and supply chain alignment enjoy higher supply performance. We conducted some research on this topic a few years ago and showed the difference in supply performance between firms with this top quartile influence/alignment capability below:

Figure 1: Organizations that have top quartile direct procurement influence on supply chain management outperform their peers on numerous supply performance criteria



We’ll highlight some of these top capabilities and some of the strategies and supporting digital solutions that can help enable them.

Part 1 of this series laid out the need for leadership in procurement to help bring about transformational change — and how to work with stakeholders. In Part 2, we discussed how progressive procurement organizations were improving their influence through coherent communication and alignment of procurement “services” to various stakeholders.

This installment also has details about direct procurement vs. supply chain procurement, and we discuss some solution providers that can help.

What is driving Tipalti’s $2 billion valuation? 10 reasons AP Automation is such an attractive market

procurement

Yesterday, Tipalti announced it had raised $150 million at a cool $2 billion valuation. (See Spend Matters’ coverage of Tipalti below.*)

What is remarkable about this raise and the valuation is that Tipalti, which focuses on accounts payable automation and payments, is still a relatively small firm in the procurement and finance technology sector, even if it is growing at a strong clip.

While I don’t have current financials on the firm that I can share, Owler lists them (erroneously low) at $15 million, and applying the ever-convenient $200,000 or $250,000 per employee multiple based on LinkedIn employees still places them materially below $100 million in revenue.

So regardless of how you slice it, we likely have a private company here — and one that was founded outside the U.S., in fact, that can sometimes hurt comparative valuations — valued in excess of 20X top line.

For an outsider to this sector, barring truly off-the-chart growth metrics (beyond even top-performing cloud application norms), this might seem anomalous. But it’s not, given a number of variables at play here in the AP automation and B2B payments market.

In this Nexus column, I will share the “inside baseball” 10 reasons why AP is such an attractive market for firms and investors — and why Tipalti is smack dab at the center of any rationale investment thesis in this market (including a contrast with superior functional solutions for AP such as Basware, which is comparatively uninteresting from an investment vantage point).

* See Tipalti’s latest Spend Matters coverage and ratings below:

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and business strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter. Disclosure: Azul Partners has advised numerous sponsors and firms in support of M&A strategy and due diligence in the accounts payable automation and B2B payments sector.

Coronavirus impacts the world of work (Part 3): Acting in an uncertain economic recovery [PRO]

home working

While COVID-19 has disrupted the U.S. economy in ways which were practically inconceivable a year ago, it has also overturned long-standing, fundamental assumptions of how businesses must operate. Organizations, for example, are finding that they can operate with a larger remote workforce, they can flex their now-significant contingent workforces, and they have access to technology that can make business transformation possible. This should also be a time for procurers of contingent workforce and services (CW/S) to re-evaluate and reset their assumptions. Right?

This is the third part of the “Coronavirus impacts the world of work” series focusing on contingent workforce/services management in the era of the COVID-19 pandemic. Each part of the series aligns to one of the four stages of the crisis that we mapped out in the spring:

Part 3 of this series now addresses what we called the recovery/upswing stage, looking at what it means, assessing the current environment and trends, and presenting considerations for organizations and CW/S practitioners.

Beyond Spend Influence: Enabling Procurement’s Emerging Roles in Business Transformation (Part 3) — Digitally Enabled Engagement, Outcomes, Demand and Spend [PRO]

lending

In the first installment of this Spend Matters PRO series, we kicked off our analysis of how progressive organizations are influencing spend and stakeholders at a deeper level beyond traditional sourcing influence.

In Part 2, we discussed how progressive procurement organizations were improving their influence through coherent communication and alignment of procurement “services” to various stakeholders. This influence isn’t just seeking to drive stakeholders to procurement for procurement resources exclusively to create value that procurement gets credit for, but rather, to have procurement educate and enable stakeholders to make the best decisions that will deliver the outcomes most important to them.

Jeff Bezos, the CEO of Amazon, said in an interview, “I don’t think we make money when we sell something, we make money when we help someone make a purchase decision.” In other words, Amazon is looking to be your trusted advisor and buying concierge to help you get the best deal (whether or not you actually do — especially with dynamic pricing!), which keeps you in the Amazon “walled garden” and elevates its brand/role beyond just being another online supplier to find stuff. By broadening its value and “brand permission,” it can then “help” you make these purchase decisions and others in your life. Just ask Alexa!

In this installment, we will dive into the details of how some procurement organizations are digitally enabling this engagement and elevating their brand in ways that meet stakeholder outcomes but also allows procurement to see and shape the demand that will drive spend, supply and needed source-to-pay resources.

The “quality” of spend influence isn’t about late-stage sourcing involvement, but rather, early engagement upstream at the moments of truth when spend is being planned by a few critical budget holders — or when suppliers are being sought by thousands of employees with a business need.

In either case, procurement must proactively find the stakeholders or help the stakeholders find procurement (or find the preferred suppliers and their products/services via “guided buying”). There isn’t just one “seat at the table” for procurement, because there is not just a single table to sit at (although the CEO’s executive team/committee is a good one!), but multiple tables where stakeholders sit.

Beyond Spend Influence: Enabling Procurement’s Emerging Roles in Business Transformation (Part 2) — Empathy, Alignment, Mission, Brand and Procurement Service Delivery [PRO]

In the first installment of this Spend Matters PRO series, we kicked off our analysis of how progressive organizations are influencing spend and stakeholders at a deeper level beyond traditional sourcing influence. In this next edition, we’ll dive into some strategies for deeper and more meaningful engagement with stakeholders, and some examples from some progressive procurement organizations.

3 Deals Signal a Changing M&A Landscape in Procurement Technology and Solutions (Part 1: Coupa-ConnXus)

Mergers and Acquisition News in procurement industry

Despite coronavirus lockdown measures, the past couple of weeks have seen a flurry of deal announcements in the procurement technology and solutions world (which represent the M&A “re-start” of about a dozen material transactions that you’ll be hearing about for the rest of the year).

Deal activity is not just financial engineering. It is form following function. And form in this case is the fact that procurement technology and solutions are still going strong in most cases inside companies and government. In other words, they’re still buying stuff, at least in many cases.

The reason procurement technology and solutions, even in the economic uncertainty maelstrom of COVID-19, are still hot compared with other sectors is simple: No other set of capabilities or tech can be tied so directly to cost reduction/takeout, risk mitigation, working capital improvement and process efficiency/automation (yeah, we know what that can sometimes be code for, but unfortunately it’s true — as labor economists would agree).

In short, even in the current mess, companies and the public sector are still active consumers of procurement technology and solutions. And on the transaction side, deals aren’t slowing down entirely either, even if the debt markets are still a challenge. Moreover, valuations aren’t taking the same hit as in other sectors (either in the private deals we’re seeing or in the capital markets). Coupa’s stock, in fact, just hit an all-time high last week, valuing the company at nearly $13 billion, putting the firm at over 30X revenue on a trailing basis. That’s HUGE.

Still, there’s changes afoot from a deal perspective. And I believe three recent transactions collectively suggest precisely how the M&A landscape is changing.

In this three-part Spend Matters Nexus analysis, I will share my own perspective on the shifts, both from a corporate development lens (what I used to do) and a private equity lens (the practice I lead today for Azul Partners).

Some of these shifts are subtle, others not so much. But one thing is coming into sharp focus for me: More folks are going to miss out on opportunities if they fail to put the right pieces on the chessboard soon.

Deals covered in this series are Coupa-ConnXus, Apttus-Conga, and Bregal Sagemount’s recent $80 million investment in Corcentric.

For each, here are the questions I’ll answer:

  • What is the summary of the transaction?
  • What is the “gotcha” of the deal (for me)?
  • What additional factors make the transaction interesting?
  • What does it signal for tomorrow (why is it an important signpost for the road ahead)?
  • What are the competitive/market implications for sponsors and strategic buyers?
  • What other (related) providers are interesting to look at in the same or similar markets?

For this installment, let’s look at the Coupa-ConnXus deal.

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service.

Analysis of Apttus-Conga deal — Background, transaction analysis and a bit of armchair speculation [PRO]

Mergers and Acquisition News in procurement industry

Apttus made waves in the CLM market this week with an announcement of its intent to acquire Conga, merging the two firms under the Conga brand to create a hefty player for “configure, price, quote” (CPQ) software, CLM and document management with roughly $400 million in revenue. The deal is perhaps not the transaction one would expect of either player. Both vendors have considerable product overlap, bringing together a set of sell-side CLM capabilities and deep historical hooks into the Salesforce ecosystem.

Still, there is some rationale for the deal. As you peel the onion on customers, the CLM market and where future deals could arise, you can see the potential logic behind Apttus owner Thoma Bravo’s move. At its core, the deal is about quickly producing scale, as the combined firm counts well north of 11,000 customers. It also brings a significant toolbox of CLM adjacent tools (e.g., CPQ, BPM/workflow management) into one ecosystem, which in turn creates a competitive alternative to the other elephant in the CLM room (especially from a customer count standpoint), DocuSign, which with its acquisitions of SpringCM and Seal Software has built its own contract management ecosystem enabled by its ubiquitous e-signature product.

So just what exactly do Apttus and Conga offer customers today, and what are the key takeaways for the CLM market? Spend Matters has not yet been briefed on the “new Conga” product merger plans and firm strategy, but we do have deep background into Conga, given its recent participation in the Spring/Q1 2020 CLM SolutionMap, and a few ideas about how the transaction could play out for another strategic buyer down the road.

Let’s explore these now ...

CORONAVIRUS RESPONSE: Contract Analytics — Finding and Managing Contractual Risk and Reward in a Pandemic [PRO]

In the Spend Matters Coronavirus Response series, we are exploring the COVID-19 related business scenarios where the pandemic is affecting supply chains and commercial relationships — and how various countermeasures, solutions and providers are helping to respond. Much of the pandemic coverage started upstream in China where the outbreak originated. Last month, an ISM report that was conducted in late February cited that 62% of firms saw delays in orders from China (and a majority of firms also cited delays in simply getting supply chain information out of China). We did a deep dive into supply risk as the first topic of our now seven-topic series covering the pandemic response in areas such as:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc. (Read this category’s PRO analysis and solution recommendations here.)
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (See this category’s recommended solutions for direct sourcing here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series is here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (This category is discussed in-depth here.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic.
  7. Contingent Workforce and Services solutions that are able to, at a minimum, help rapidly ramp up on-demand workers to deal with massive resource shortfalls. We are looking at four categories of solutions: for sourcing remote/online work; solutions for sourcing and managing mobile-first contract workers anywhere you need them; solutions to “direct source” and manage contract workers; and solutions for data management and analytics.

This installment of the series covers contract analytics, No. 6 above, and deals with the topic of contracts (and commercial relationships more broadly). Staying on the China theme for now, the pandemic’s impact on Chinese supply chains led to roughly 6,000 force majeure certificates being issued by the PRC via its trade body to Chinese suppliers (a nearly 5x increase since early February). A force majeure clause provides relief from contractual obligations due to external events that are unpredictable/unforeseeable, unpreventable and of no fault of your commercial counterpart — and these certificates are somewhat of a “get out of jail for free” card for contracts.

The supply risk management firm Riskmethods cited that it has seen a 44% increase in firms that declared force majeure and a corresponding 38% increase in production stoppages or reductions in operating hours. It’s the latter metric that should be unpacked a bit. Force majeure is just a single clause, but it’s an interesting one because, similar to a business continuity clause, it represents how trading partners can help model and manage the effects of external risk/complexity on the commercial relationship. For example, Kira Systems, a contract analytics provider, recently conducted a study of two years’ worth of such Chinese supply agreements and found that within their sample of 130:

  • Only 74% even had force majeure clauses!
  • Of those contracts, 89% had contract language specifying the impacts/effects on the commercial relationship.
  • Within those, 42% specified contract termination effects, but 55% specified contract suspension (e.g., suspending performance obligations through some period of time) and 39% discussion/consultation to remedy the situation.

The whole point of this discussion on force majeure is to illustrate that contracts shouldn’t just be boilerplate text documents that include generic clauses that sadly try to properly transfer commercial risk to counterparties, but yet, end up creating downstream confusion and ill will because they don’t actually provide the needed risk mitigation and recovery when the crap really hits the fan like the coronavirus pandemic. The best contracts work in concert with robust risk management processes, policies and playbooks so that when various external conditions change, the underlying contracts can translate those changes to the affected parties and actually give them the decision-support / options to help jointly mitigate them (a business continuity clause is just one example here).

And herein lies the foundational problem: If you do not have an electronic contract repository that is filled with “intelligent” contracts that model the richness/complexity of the value exchange between the parties in commercial relationships in a risky world, you’ll be driving blind and putting yourself at risk. It’s like playing football without a playbook and not knowing what plays to call and how to actually successfully run the plays — NOT a recipe for success! We’ll return to this concept of playbooks later when we discuss Seal Software. Seal delivers many of its world-class contract analytics through a playbook approach where specific playbooks (i.e., the sequence of granular analytics to run that answer specific questions and support specific business use cases) and “rule books” (i.e., rule libraries and knowledge bases that are built on top of a rich contract data/metadata model) are served up as “Insight Packs” that can then be tailored by the client and augmented with Seal experts.

The foundational problem of poor commercial intelligence from an online contract repository takes many forms. IACCM benchmarks estimate that between roughly a quarter and a third of firms struggle to 1) find contracts they’re looking for, 2) find specific information with particular clauses, and 3) assess/report risk in their contract portfolios. So, when you consider the impact of COVID-19 on your customers, suppliers and employees, you can see how pervasive the pandemic’s impact is on contracts related not just to force majeure (and related clauses for termination, governing law, jurisdiction, arbitration, etc.), but also provisions related to delivery performance/service levels, liquidated damages, payment terms, limitation of liability and others.

We’ll dive more into the above clauses later when we get into specific use cases, but for now, CLM providers or niche contract analytics providers should be able to analyze contracts and related broader commercial information (which we call commercial value management, CVM) that in turn allow firms to:

  • Interrogate the contract portfolio proactively based on advanced search down to the clause level and even to the provisional language that includes specific obligations and risks (that hopefully have already been specifically modeled and extracted into granular metadata fields).
  • Perform where-used analysis and “related contracts” pegging to find impacts and enable changes (some of them being mass changes).
  • Identify what contracts have specific clauses in place (or not), including where either you or your counterparties can claim force majeure, but also the related information that determines the related clauses for notifications, required information for proof of harm, proof of mitigation (which might be specified in a business continuity clause), and types of available remedies/resolutions (contract suspension, cancellation, amendment, etc.).
  • Relate contracts to other critical data about counterparties (suppliers, customer, etc.) and value chains to help prioritize where to focus based on certain clauses. For example, customers might be actively trying to cancel/renegotiate their contracts that in turn may link to specific suppliers that you’ll need to pass on the pain. Some CLM systems allow this type of supplier-customer contract linkage.
  • Get ahead of contracts that will do you harm in terms of performance obligations and renewals (and related steps), but also use the pandemic as a good way to re-prioritize sourcing/negotiations efforts and also third-party/supplier risk management activities (e.g., liability issues for essential contractors that still are needed on site in operations)
  • Respond to specific adverse contract events that are occurring in real time (e.g., attempted contract cancellations) while also trying to support new deals and support transformation activities.
  • Support transformation activities during the downturn so that you can address highlighted weaknesses in your contract portfolio (e.g., weak/generic force majeure clauses that don’t specify pandemics or other related clause information).

We’ll dive more into the above clauses later when we get into specific use cases, but for now, such analytics help organizations answer the following questions related to some high-level use cases:

  • How can my contracts guide me in my need to radically cut costs, and more importantly, preserve cash?
  • How can I work with suppliers (or any supply chain partners) to accelerate existing cash-to-cash cycles and reduce working capital levels?
  • How can I support supply chain risk analytics to better support rapid decisions and risk mitigations?
  • Are “wet ink” paper contracts still being used, and isn’t it silly to continue using them given that COVID-19 can be spread through human-based contact or via intermediate surfaces (like a signing pen)? The chances might be infinitesimal, but there’s no better time to finally be moving to a fully virtual contract lifecycle and to get all paper contracts digitized into a proper contract repository. And where are contracting bottlenecks for customer contracts, supplier contracts, contingent workforce contracts and others holding up the value chain when every second counts and every precious resource counts even more than usual.
  • How standardized are our contract terms that are being lit up during the current pandemic, and can we use the crisis to help improve this standardization? Also, how richly are the contracts being modeled so that they can be directly interrogated for such decision support questions? And can these contract risk factors be the perfect way to align and operationalize other risk management processes and systems across the business? Hint: The answer is yes! And as a shameless plug, Spend Matters compares CLM solutions in our SolutionMap benchmarking process/database based not just on process-specific functionality, but also on the richness of the contract information models and underlying technical platform elements.

We’ll drill down into the high-level questions and examples in a moment, but for now, it should be clear that having a modern CLM system (and a commercial knowledge management database built within that system) with robust contract information modeling and associated contract analytics is a critical business competency to manage commercial value (i.e., the “CVM” concept again). But you don’t have to be on the leading edge of AI-based contract analytics to get many benefits from a CLM application, although having a CLM solution with some of these capabilities is a key advantage. These include providers such as DocuSign (with its pending acquisition of Seal Software), Conga Solutions, Agiloft, SirionLabs, Coupa (via its acquisition of Exari), and Apttus.

Some providers have built out specific COVID-19 capabilities.

For example, Seal Software brings its capabilities to bear with existing clients. SirionLabs has built a COVID-19 specific dashboard that has some straightforward analytics, shown below. SirionLabs also specializes in supporting “agile contracts” for large-scale services contracts like BPO deals so that if demand for services spikes or drops precipitously, the contracts can be updated dynamically to accommodate those shifts.

(Click to enlarge image)

CLM market leader Icertis shared some examples of clients using its solutions in interesting ways to address the crisis:

  • One well-known US-based multinational consumer electronics retailer has had its in store performance hit hard by the pandemic and has used the Icertis ICM application to digitize and radically speed up its supplier rebates process with electronics manufacturers — thus helping improve cash flow.
  • Another client is a food supplier/distributor that has been hit hard in its restaurant segment and has used the ICM solution for guided contracting in a mobile app that helps configure the sales contract based on various customer attributes, including payment terms calibrated to the financial status of the customer.
  • A life sciences firm had one of its coronavirus-affected regions move legacy contracts onto the ICM application so that workers didn’t have to physically go find contracts in the office buildings!
  • This move to a virtual CLM environment was cited by Granite Construction, a $3 billion firm headquartered in California, where a procurement staffer mentioned that “many back-office departments, including legal, had to transition to working from home. Since all of our contracts and contracting processes were cloud-based ... there has been little to no change for our business.” “Contracting had always been important, but now it’s more critical than ever. When the outbreak hit, we knew risk indemnities and force majeure clauses were already in our templates and our contracts; we didn’t have to think about it.”

These examples illustrate that contract management has a place in the coronavirus response, even if the use cases are very straightforward and don’t require advanced capabilities such as AI-based analytics.

It’s also important to realize that these commercial/contract issues are impacting an ecosystem of solutions / services providers beyond CLM tech providers. For example, NPI Financial is a market leading IT-intelligence provider and they offered up some insights on what they’re seeing around this topic in the IT/digital markets:

“Some buyers in hard-hit industries are defining plans to ask vendors for special concessions. This requires a strong business case and buyer-side compassion. What (if anything) can a buyer offer the vendor in return for concessions? E.g. Longer commitment, faster payment in the future, ability to use their name publicly in an approved case study or ad, etc. One thing we’ve seen across several of our clients is that buyers are approaching this with compassion — one enterprise told its IT sourcing team to “behave ethically and don’t be outrageous” as they push for cost reductions across their IT supplier base. They know some vendors are also hurting and want to be sure they’re financially sound and strong when we come out on the other side of this crisis.”

It’s encouraging to see buyers taking a holistic and humanistic approach that also lets them be a “customer of choice” when critical vendors/suppliers are hard-hit and to use the buyers’ market leverage responsibly to create value with a win-win approach that should pay off down the road with a thankful supplier.

Within the rest of this Spend Matters Coronavirus Response installment, we’ll dive a little deeper into some use cases and supporting tools.

Some providers are offering coronavirus-specific programs and “freemium” commercial offers, and we’ll note those whenever we update this piece. We’ll also start the series with providers that we already have deep knowledge on, but we’ve been seeking information from other providers too.

Through April 2020, a special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off — Learn more

The impact of COVID-19 on M&A and procurement technology investing (Part 2: Private Equity)

Mergers and Acquisition News in procurement industry

Outside of highly targeted or opportunistic investment interests, the technology and solution areas for procurement and finance have only garnered significant attention within the private equity community in recent years. But in less than half a decade, these firms have become a staple in M&A in the sector. And not only has private equity driven the acquisition and buyouts of many of the largest companies in the sector, but it has also been a source of growth capital investments as well (albeit not as frequently). In recent years, just about every process above a certain size — including numerous providers eventually picked up by strategic buyers — involved one or more private equity firms at some stage.

I spend a good portion of my time leading Spend Matters’ effort to provide strategy and due diligence support to these firms, and in recent weeks, I have been in touch with over a dozen colleagues in the industry. Today, in Part 2, we turn our attention to this segment of the market, examining the COVID-19 situation on the private equity markets, in particular, as it pertains to M&A and buyouts.

This Spend Matters Nexus series, including today’s column, is open to everyone during the coronavirus crisis. It provides insight and analysis about what is happening with procurement and finance technology investing — as well as what we can expect in the months to come, as we emerge from the coronavirus disruption.

If you’re looking for a baseline of information on M&A in these markets at the moment, read Part 1 of this series: The Impact of COVID-19 on M&A and Procurement Technology Investing (Part 1: Introduction).

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service.

The Impact of COVID-19 on M&A and Procurement Technology Investing (Part 1: Introduction)

Mergers and Acquisition News in procurement industry

I’ve decided to open up new Spend Matters Nexus columns and research briefs for everyone, not just subscribers, in the next few weeks, as we’re all certainly in a crisis period with the COVID-19 outbreak. To help make my coverage of investing and M&A more digestible, these dispatches will be shorter than usual (some will include frameworks and charts, others will not).

Having worked through two major shocks and downturns — the B2B.com implosion in 2001-02, the 2008-09 recession — I’m seeing both similarities and differences between those times and the coronavirus fallout today in the procurement, finance and supply chain technology worlds. But for different types of investing, asset classes and M&A activities, it’s clear the effects are already quite individualized.

Today, I’ll start with a summary perspective on what entrepreneurs, CEOs and business owners should expect for the next few months, based on transaction type. Please note: This column is not based on extensive primary research and survey data, but rather anecdotal evidence from what I’m seeing in the market, primarily as an advisor to sponsors and executive teams, but also as an angel investor and advisor myself.

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service.

How does McKinsey’s acquisition of Orpheus affect Sievo and the spend analytics solution landscape? (Part 1: Background)

I’ve long been a fan of the spend analytics firm Sievo (going back to when my friend Fabrice Saporito was helping drive its commercialization as CEO in the formative years). But in a world where procurement and spend analytics technology ages fast, constant investment in R&D to drive solution improvement is key. You’ll need to read SolutionMap Insider (Analytics) and Spend Matters PRO (see our recent Vendor Snapshot of Sievo: Part 1, Part 2 and Part 3) to see how Sievo stacks up today, product wise.

But more important from where I sit today on the strategy and transaction side of the house (vs. the product one — I’ll leave that analysis entirely to the Spend Matters analyst team), is how McKinsey’s acquisition of Orpheus moves around the chess pieces on the partner and M&A board in terms of Sievo and its peers (Sievo, prior to the Orpheus acquisition, had a partnership with McKinsey). Does the deal help or hurt Sievo’s stock, so to speak?

In this two-part Nexus analysis, I’ll offer a perspective on this, starting with a look at Sievo (by the numbers including estimated revenue, customers, etc.) and what makes it attractive for partners and potential suitors.



But more important than what this means for Sievo as a potential strategic partner for others, alone, is what it means for all the other vendors, consultants, managed services and BPO firms in the market looking to build, OEM or acquire the right procurement, finance and spend analytics capabilities for their needs now that Orpheus has been taken off the chessboard. I’ll also explore this topic as well in this Nexus analysis.

Let’s dive in.

Jason Busch is Managing Partner of Azul Partners’ Investor Advisory Group. He works with sponsors, CEOs and boards on data-driven due diligence, M&A and strategy. Jason is also the lead author of Spend Matters Nexus, a private newsletter and subscription service that publishes 50+ times per year. Spend Matters and Spend Matters Nexus are owned by Azul Partners. His investment disclosures and other activities can be found on LinkedIn.

2020 Procurement Predicaments and Predictions — Gaps and a Mega Prediction (Series Wrap-Up Part 3) [PRO]

In this last installment of Spend Matters’ 2020 predictions wrap-up series, we’ll dive into some additional predicament areas where there are substantive gaps to address within the digital procurement market. We’ll also explore a “mega prediction” related to digital platforms (not applications) and how this digital land grab will have an impact on picking an optimal digital platform strategy for procurement. Click here for Part 1 and Part 2 of the wrap-up series.