Procurement Technology - Premium Content

The 5 Levels of M&A Technology Integration: Stage 2 [PRO]

In this Spend Matters PRO series, we define, introduce and explore the five levels of M&A technology integration that vendors must go through when bringing together different modules and platforms. We should note, however, that bringing together different applications and technology stacks is not a requirement of any acquisition. But anytime a technology provider wants to market and achieve customer synergies through a transaction outside of “cross-sell/up-sell” the degree of integration planned, its timing and ultimate realization should be a priority for investors and customers alike.

Today, we explore the second level of integration that occurs in a post-merger situation or when vendors replatform old technology onto a new stack while still having to maintain existing solution capability on the legacy platform. From a vendor perspective, we define how to do it and provide examples of this type of integration. And from a user perspective, we suggest tips and tricks for technology buyers to discern this level of integration compared with others.

If you’re new to this series and want to learn the five levels of integration, start with this introduction. In the previous installment, we cover Stage 1 integration in detail.

The 5 Levels of M&A Technology Integration: Stage 1 [PRO]


In this Spend Matters PRO series, we will define, introduce and explore the five levels of M&A technology integration that vendors must go through when bringing together different modules and platforms.

Today, we explore the first level of integration that occurs in a post-merger situation or when vendors replatform old technology onto a new stack while still having to maintain existing solution capability on the legacy platform.

From a vendor perspective, we define how to do it and provide examples of this type of integration. And from a user perspective, we suggest tips and tricks for technology buyers to discern this level of integration compared with others.

If you’re new to this series and want to learn the five levels of integration, start here with our Introduction post.

Beyond Spend Influence: Enabling Procurement’s Emerging Roles in Business Transformation [PRO]


Anyone familiar with YouTube “influencers” knows that they’re not trying to engage you for your benefit, but for their own. They intend to monetize that influence for themselves and their corporate backers.

Speaking of the corporate realm, the ability to influence others isn’t exactly a new concept. In fact, you can go back 85 years to read Dale Carnegie’s book “How to Win Friends and Influence People.” There, you will learn more about “Fundamental techniques and handling people,” “six ways to make people like you,” “12 ways to win people to your way of thinking” and “how to change people without giving offense or arousing resentment.” In short, you can learn how to manipulate people to sell them something and get what you want.

Let’s now translate this to procurement organizations that are looking to influence stakeholders in order to influence their spend.

The procurement mission can indeed be noble in terms of helping the organization spend less wastefully to free up cash to invest in the enterprise mission. However, from the stakeholder view, what they often hear is “Hi, I’m from corporate procurement and I’m here to help you reduce your spend so that I can claim savings to justify my existence … and then have your budget reduced by corporate finance.”

Do you think the stakeholders like being influenced like this? They end up viewing procurement something like this Dilbert cartoon.

Although the situation is obviously not as bad as a dinosaur leading procurement, it does highlight the disconnect and misalignment that can lead to stakeholders not inviting procurement to the proverbial table. Of course, procurement can get mandated into the process via policy, but those policies are usually fairly toothless, and when procurement does get involved, it is often at the tail end of the process when most negotiating leverage is long gone. This is why the metric of spend under management (SUM) is more about the quantity of late-stage involvement than the quality of early and deep involvement/influence (for more on this topic see our PRO article Procurement KPIs Series (Part 4) — Deep Diving into ‘Spend Under Management’).

This earlier involvement does lead to higher savings in the short term, but you can’t “save yourself to zero,” and procurement’s influence in more strategic business settings where key decisions are made is a work in progress — based on 450 CPOs surveyed last year ...

Improving the situation requires more than sitting at the end of a sourcing process with a catcher's mitt waiting for the stakeholders to come, and having a value proposition that’s more than just transient cost/spend reductions, but something more transformational.

It requires transformative leadership, and that leadership has many elements to it: mission/vision, strategy, empathy, affinity, inclusion, empowerment, enablement, brand, respect, competence (to deliver value), trust, guidance, transformation, collaboration, clarity, coordination/orchestration, protection, agility, intelligence and even inspiration.

These are some of the contexts and the levers of real influence.

In this multi-part Spend Matters PRO series, we’ll explore these elements, how technology can enable them and a case study of a procurement organization that’s pulling these levers likely better than any other organization on the planet.

Banks can do business payment innovation too: A look at U.S. Bank’s Instant Card [PRO]

Millions of employees across the globe have adjusted to working remotely.

Amid the coronavirus disruption, some regions are beginning to see storefronts, businesses and factories slowly re-open. Whether employees are working remotely or starting to go back into the office, they need a way to make business purchases for things like home office supplies, PPE and cleaning essentials without having to use their personal credit cards.

In response, U.S. Bank fast-tracked the development of the U.S. Bank Instant Card, a fast, efficient and simple way for employees, contractors or consultants to make business purchases without complex expense reports or the need to be reimbursed.

This new solution allows a manager to instantly push a virtual corporate card to a mobile wallet for immediate use to make approved purchases, and they have the option to do it contactless. In essence, they created a replacement for petty cash with a quick and easy way to distribute a virtual card.

When it comes to innovation, banks are both not known for it, and certainly not in a speedy implementation fashion. But times are a changing, and the COVID-19 pandemic led U.S. Bank’s commercial payments group to figure out how they can help their 300,000 emerging middle-market customers develop a way to get petty cash in the hands of employees, contractors and other third parties quickly.

In this Spend Matters PRO article, we’ll take a look at the Instant Card and its capabilities.

Aligning your digital P2P strategy to your ‘post COVID-19’ business environment (Introduction) [PRO]

Companies’ plans and the markets' demands for procure-to-pay process digitization have accelerated and evolved over the last five years, but that change is nothing compared to the COVID-19 disruption seen in the first half of 2020.

The coronavirus crisis made all organizations react and rethink the pace of their digital transformation strategies, which now often must be carried out in months rather than years. As we say in Mexico, "El miedo no anda en burro" or "fear does not ride a donkey,” which means it hits you fast.

Digital transformation (in this case for P2P processes) must now take place ASAP — especially if you’re trying to match invoices back to manual contracts that are sitting in the deserted office! Organizations can no longer think that situations like COVID-19 will never happen again, and businesses that do not digitize their processes now will not be able to compete or even survive.

But to have a great P2P digital strategy, there is more to understand. The changes that businesses are facing are not just about those caused by COVID-19; it is about those forces that are magnified by COVID-19: geo-political accommodation that is happening in the world, the change of global powers, oil prices, gold, the U.S. dollar volatility, social responsibility, global sustainability, global supply chain risks, security.

All of these and other factors greatly affect "B2B procurement" — and we intend to discuss what can be done about it.

The goal of this Spend Matters PRO series is to support buying organizations with a list of key questions (and potential answers) to build a solid and holistic procure-to-pay digital strategy. I will outline 10 major business requirements within the current environment that require strong P2P capabilities. I will then highlight 13 critical digital P2P capabilities that support these requirements.

P2P becoming central to meet key business demands

P2P solution providers know that today is the perfect time for procurement to generate value for a business because COVID-19 has disrupted supply chains (see our Coronavirus Response series here) and the crisis has shown that P2P activities have become central to keeping businesses' operations on track, efficient, financially healthy (and keeping suppliers healthy too), and protected from risk/fraud. P2P is obviously more than just issuing POs and processing invoices, but also includes capabilities (described in great detail in our SolutionMap vendor rankings) such as:

  • Integrating e-procurement, e-invoicing and e-payments processes with each other and also to upstream sourcing and supplier management processes.
  • Keeping spend under management, in compliance, optimized and risk-free (e.g., supporting category management objectives)
  • Supporting effective cash-flow planning, monitoring and “optimization” (e.g., with supply chain financing possibilities)
  • Strengthening suppliers collaboration and relationship management as everything is becoming virtual

These business demands are core focus areas for companies. And there are new ones — but let's first illustrate how a changing business environment, a constantly evolving global organization, an ever-growing and more prepared competition that pushes to keep innovating, etc. are making all these demands continuously evolve. They are creating a more complex P2P scenario for all organizations that the P2P strategy and solution providers need to support to keep businesses’ eyes on the prize.

Just as an example to illustrate how business demands are evolving, let’s consider this: Not long ago, the most important topic in B2B procurement was to achieve e-procurement user adoption in order to increase spend under management. Vendors such as BuyerQuest and Coupa came up with an Amazon-like user interface, which became the most important e-pro feature to have.

Today that is not enough.

Now the UI is more about having the user experience (UX) not just delight the users, but now includes “pathing” them on intelligent workflows — and this intelligence keeps evolving and improving. The changing business environment keeps ratcheting up new demands for P2P processes and the value they need to create. It’s not an easy task to meet those demands, but it is possible with today's emerging technologies and system's integration platforms.

In the rest of this Spend Matters PRO article, I will discuss the business issues/requirements that P2P leaders need to satisfy in order to align with them and deliver P2P value, and then use this to discuss the critical P2P capabilities needed to support them. Only then can these leaders (and supporting solution/service providers) align their digital capabilities to them as well.

In future analyses, we’ll dive into these specific capabilities, link them to business pain points (and ROI and business cases), and detail what digital strategies and providers can help implement them.

Intelligent software agents in advanced sourcing: The bots really are the experts

Exciting times for Ireland-based, sourcing automation and optimisation software firm Keelvar. We don’t hear from them for a few years then, suddenly, major news! Keelvar, […]

Artificial intelligence levels show AI is not created equal. Do you know what the vendor is selling? [PRO]

Just like there are eight levels to analytics as mentioned in a recent Spend Matters PRO brief, artificial intelligence (AI) has various stages of the technology today — even though there is no such thing as true AI by any standard worth its technical weight.

But just because we don’t yet have true AI doesn’t mean today’s “AI” can’t help procurement improve its performance. We just need enough computational intelligence to allow software to do the tactical and non-value-added tasks that software should be able to perform with all of the modern computational power available to us. As long as the software can do the tasks as well as an average human expert the vast majority of the time (and kick up a request for help when it doesn't have enough information or when the probability it will outperform a human expert is less than the expert performing a task) that's more than good enough.

The reality is, for some basic tactical tasks, there are plenty of software options today (e.g., "intelligent" invoice processing). And even for some highly specialized tasks that we thought could never be done by a computer, we have software that can do it better, like early cancerous growth detection in MRIs and X-rays.

That being said, we also have a lot of software on the market that claims to be artificial intelligence but that is not even remotely close to what AI is today, let alone what useful software AI should be. For software to be classified as AI today, it must be capable of "artificial learning" and "evolving its models or codes" and improve over time.

So, in this PRO article, we are going to define the levels of AI that do exist today, and that may exist tomorrow. This will allow you to identify what truth there is to the claims that a vendor is making and whether the software will actually be capable of doing what you expect it to.

Not counting true AI, there are five levels of AI that are available today or will likely be available tomorrow:

  • Level 0: Applied Indirection
  • Level 1: Assisted Intelligence
  • Level 2: Augmented Intelligence
  • Level 3: Cognitive Intelligence
  • Level 4: Autonomous Intelligence

Let’s take a look at each group.

The basics of analytics: 8 levels — and the AI leverage [PRO]

Analytics is hot. In many organizations, analytics has gone from a "nice to have sometime in the future" to a "we need real-time, AI-backed predictive analytics yesterday to stem the flow of red."

But, as we've said before, not all analytics is created equal, and understanding what you are considering and what it can — and cannot — do is becoming more important than ever.

So in this Spend Matters PRO piece we're going to provide a short refresher on the levels of analytics — what they are, what to expect and what not to expect from each of them.

There are eight levels to analytics, and current solutions fall somewhere in the first seven. The majority offer functionality firmly contained in the first four levels, with only the minority truly offering full Level 5 functionality or higher.

We’ll also review some example functionality to help you understand what is, and isn't, out there and give you some guidance on how to compare the different platforms (and whether what a vendor is offering is sufficient for your organizational needs).

Coupa, BELLIN and Treasury Management Systems: What CPOs and CFOs need to know about TMS and links to procurement technology (S2P, P2P, AP) [PRO]

market intelligence

Earlier today, Coupa announced its acquisition of BELLIN, a treasury management system (TMS) provider. We covered the announcement on Spend Matters.

And on Spend Matters Nexus, a subscription service that focuses on sector M&A, we provided background insight into BELLIN, treasury (as a function) and the value proposition for procurement and AP in bringing procurement and treasury systems closer together from a systems perspective.

In this Spend Matters PRO analysis, we provide an introduction to treasury management system (TMS) components, describe the rationale for a TMS (over manual or kludged processes) and describe their touch points (foundational and advanced) with procurement technology systems / process architectures — including source-to-pay, procure-to-pay and accounts payable systems.

This research brief is aimed specifically at CPOs and CFOs, as well as source-to-pay process leads/owners and treasurers.*

But before we begin, let us tease out why this move should be perceived as exciting by CFOs. To bastardize one of the most famous statements of all time, this is a small step for Coupa, and a GIANT leap for procurement technology. Think about what “business spend management” is for a minute.

What is “spend”? It's cash flowing out the door.

So in practice, business spend management in Coupa jargon is essentially supplier cash disbursements management — ideally impacting cash before disbursement! But treasury is cash with a big C and therefore it’s spend with a capital "S." In practice, this is Coupa's first real foray — any vendor’s, for that matter — into broadening into "big spend management,” something we wrote about 5 years ago in fact!

Prior to making this more concrete in terms of what comprises a treasury management solution and its touchpoints with a source-to-pay (or procure-to-pay) procurement architecture, let us also keep our eyes on the prize by broadening the focus of business spend management.

If the business itself (i.e., CFO/CEO/board) is focused on return on invested capital (ROIC) and C as a proxy for cash (although in practice it’s always harder to liberate it than it is in theory), then procurement can transcend its role of just improving "R" through “spend”/savings, and take a more strategic role in bringing procurement and treasury together:

  • Freeing up cash through working capital improvement programs
  • Variabilizing costs to reduce invested capital and asset footprints
  • Reducing costs of capital and improving earnings (e.g., rebates) via innovative trade financing programs
  • Aligning spend planning and cash planning to sync up procurement and treasury with each other and the business during the FP&A process
  • Investing cash into innovative suppliers (e.g., digitally disruptive ones) rather than T-bills

OK, enough (attempting) to wax eloquent on the future of finance and procurement for now.

Let’s get down to what we’re here to introduce today: “TMS 101,” BELLIN, Coupa, the enterprise opportunity, and impact on the market.

* For vendor analysis, market and M&A-centric analysis, see our Spend Matters Nexus coverage of the deal.

CORONAVIRUS RESPONSE: Dear Procurement, AI won’t save you, but rules-based automation might! [PRO]

This Spend Matters analyst brief has been posted outside the PRO subscription paywall to share information that could help businesses take on the coronavirus disruption.

Given the coronavirus-related chaos going on now, you'd think now more than ever you'd want a solution that could just take some categories off your plate and source/procure them for you. But, all of these "AI" solutions are based on classical machine-learning algorithms that have produced standard responses based upon standard situations identified from large historical datasets where a significant amount of the time the data is consistent — price is relatively static over a period of time or rises over time in accordance with a predictable trend line, supply/demand imbalance is relatively consistent, there are no major shake-ups in the supply base or customer base or new major product introductions that significantly impact the supply/demand imbalance, etc.

Compare this to the current situation. There is no historical data that describes this chaotic coronavirus situation, and no standard responses in the platform's repertoire. There's no statistically relevant response and anything the platform did would be essentially random.

Now is NOT the time to deploy AI-based sourcing and procurement technology, and it's not the time to over-rely on any existing AI-based sourcing and procurement solution you might already have. You can use the analysis capabilities where you have access to daily information feeds and look at the recommendations, but definitely do not use any auto-sourcing/auto-procurement. Apply human oversight to every key step of the process until the global economic situation settles down to a new normal that has been consistent long enough to produce enough data for the algorithms to learn from and adapt to. Everything is an exception now, so there are no consistent rules.

On the flip side, you have no time for any tactical, semi-thoughtless tasks that can be automated, or at least automated the majority of the time and only escalated to human review in exceptional situations. Now that we're all stretched thin, working remotely, having to spend most of the day in online meetings, we need automation more than ever. In particular, we need all of the classic automation that has been used for years as well as the automation that is underlying modern AI-based sourcing and procurement programs, but manually (and not system) controlled through rules and semi-automated processes with exceptions and forced go/no-go confirmations by humans.

What's the difference?

Through this month, a Spend Matters' special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off. The discount applies to PRO subscription content from our analysts and other services. — Learn more

What’s the Price: Expert product cost management vendor review — a PRO Collab brief [PRO]


Editor’s note: This vendor review of What's the Price is the first in our "PRO Collab" series. Spend Matters will be inviting our expert friends in the industry to collaborate with us and complement our PRO coverage of the procurement, finance and supply chain solution landscape. Eric Hiller, the most knowledgeable person we’ve ever met in the product cost management sector, will kick off our Pro Collab initiative with his perspective on how the vendor What’s the Price fits into the cost modeling landscape.

Hello there, spend analytics crowd, product cost management fans and anyone else interested in improving the bottom line!

Back in December, Spend Matters was kind enough to invite me to do a two-part series on the most popular tools for product cost management on the market today (see Part 1 and Part 2). These tools spanned a wide range of use cases, including should-costing, target costing, design for manufacturing and assembly, parametric costing, spend analytics, etc.

Those articles were written from a historical perspective, and they classified solutions into sub-groupings by how they work. We received quite a lot of positive feedback on these articles, but many readers also asked us if we could go deeper into some of these applications and what their proper uses are in driving impact to the bottom line. We want to make sure that we help everyone as much as possible, so this is the first in hopefully a larger series of these spotlights on product cost management software tools.

We're starting today with one of the youngest tools on the market, What’s the Price, or WTP.

What's the Price entered the market about 2012 as the brainchild of three founders: CFO Jan-Paul Plieger, a former CEO and supply chain economist; CEO Robert Driessen, a seasoned supply chain procurement executive; and CTO Nico Bontenbal, a software entrepreneur.

User profile image

In January, Jan-Paul and Robert welcomed me to their offices in Rossum, Netherlands, where they gave me a personal demo of the software and an in-depth explanation of how they have been able to help customers. They even were kind enough to give me a demo license to tool around in the application and put the horse through its paces.

Here’s my detailed take on the solution from a product cost management perspective.

DocuSign-Seal Software transaction analysis (Part 1): Looking at DocuSign’s CLM assets (DocuSign, SpringCM, Seal)

Spend Matters recently predicted that DocuSign, the electronic signature specialist, would buy the AI-assisted contract analytics firm Seal Software (another reason that subscribers to our PRO research are ahead of the market). As the prediction noted in January, “we can’t help but think that DocuSign will be actively looking for inorganic growth options in 2020, and Seal Software might be an obvious choice given its previous $15 million investment. DocuSign will also likely need to focus its attention to the buy-side to bring some parity to its SpringCM pickup.” And so the prediction came true. Perhaps faster than we might have guessed (although the transaction will not close until later this year).

In the coming weeks, Spend Matters Nexus will publish a series of briefs covering the transaction and what it means from a corporate strategy standpoint for DocuSign in regards to targeting CLM. Our approach will include exploring remaining gaps in buy-side CLM for DocuSign.

But let’s start today by focusing on DocuSign’s inventory of assets and what Seal brings to the table, specifically alongside SpringCM.

We’ll also tackle what Seal’s AI provides to DocuSign, and offer some initial analysis about the fallout for the competitive landscape in this brave new CLM-meets-AI-meets-“platform” world (spanning a range of providers like Icertis, Agiloft, Coupa, SAP Ariba, Conga, LegalSifter, Kira, Luminance, LawGeex, Zycus, etc.). An aside in this regard: Other buy-side providers who used Seal will now be likely looking elsewhere for CLM support for counterparty document shredding, analytics and repository creation (Seal’s partners include PwC, KPMG, E&Y, Deloitte, IBM, Coupa, SAP Ariba and many others).

Let’s dive in.

If you are new to CLM market, we recommend starting with the following research briefs:

* Seal Software: Vendor Snapshot — Part 1: Background and Solution Overview
* Part 2: Product Strengths and Weaknesses
* Part 3: Commentary and Summary Analysis
* For SolutionMap Insider subscribers, see the CLM Scoring Summary that shows where vendors rank and details their capabilities, including both pure play providers (e.g., Icertis, Agiloft, SirionLabs) and the S2P suite vendors. We’ll be adding Conga in our spring SolutionMap release in March — and then add Apttus and hopefully DocuSign (SpringCM) in the fall release. The public can see the SolutionMap CLM vendor rankings by persona here for free.
* Commercial Value Management: Making Contracts the Commercial Core of Enterprise Value (Part 1) [PRO]
* CVM (Part 2): Using Next-Generation Contract Systems to Integrate Operations, Financials, Risk and Technology [PRO]
* CVM (Part 3): Critical Commercial Use Cases to Align Extended CLM with the Enterprise [PRO]
* 2020 Predictions for Contract Management: Where the CLM Market Is Going This Year and This Decade [PRO]
* Free content: 2020 Predicaments in Contract Management: Poor Adoption, CLM Market Fragmentation and Limited Imagination
* Free content: Artificial Intelligence in Contract Management (4-part series)