PRO or Plus Content

Digital Service Providers: Do They Require Your Attention and Why? (Part 2) [Plus+]

crowdsourcing

In Part 1 of this series, we described and unpacked the topic of digital platform-based service providers, which represent a modest but growing spend category far outside of the scope of contingent workforce and services (CW/S) procurement programs. While they are not on procurement’s radar, Spend Matters believes these providers will increasingly become a significant part of organizations’ services consumption and spend over the next 10 years.

In Part 2, we review what is arguably the most successful sub-segment of these digital service providers, as well as revisit the question of whether they require your attention and why.

Tradeshift By the Numbers (1H 2018) and a New Bank Offering (The “Early Payments Wallet”) [PRO]

In New York City yesterday, following the announcement of a $250 million funding round, Tradeshift provided an update to analysts, customers and partners. We covered a couple of the general updates already, including the announcement of a new receivables-centric application and supplier network offering (see: Tradeshift’s “Sellers Club” Targets Bottomline and Accounts Receivable Technology With a Many-to-Many Offering) and parallels Tradeshift is drawing from others in developing its own strategy (see: Tradeshift Analyst Day Dispatch: “Do You Want Amazon to Own Your Supplier Relationships?).

In today’s Spend Matters PRO coverage, we turn our attention to other announcements from the event, including a general corporate update (i.e., Tradeshift by the numbers) and other product announcements. The emphasis is on Tradeshift’s new bank-centric offerings that support early payment programs, including bank and multi-bank funding options, along with KYC (Know Your Customer) and the other alphabet soup requirements that banks require from a supplier/customer onboarding standpoint. We’ll also share our observations coming out of the event. Let’s begin.

5 Reasons to Bet For and Against Coupa (Part 2: The Blindsided Prince) [PRO]

Owing to its focus on “business” spend management and public company status, Coupa continues to serve as an ambassador and proxy for the procurement technology sector overall. As I noted in the first installment of this series — 5 Reasons to Bet For and Against Coupa (Part 1: The Virtuous ‘Cloud’ Prince) — it seems everyone has an opinion on Cramer’s new “Cloud Prince.” I shared five reasons I’d bet on Coupa from a procurement (not capital markets) perspective.

Today, to balance things out, I turn negative and introduce five reasons I’d bet against the firm, primarily revolving around how the sector and procurement, finance and supply chain may change around it. I’ll lump these reasons under the theme as “blindsided prince,” since I believe Coupa’s biggest risks come from outside, not within.

So You Want to Buy Strategic Sourcing? Key Differentiators to Consider [PRO]

In our previous installments of this series, we focused on some of the key differentiating aspects of contract management and spend analytics solutions. As you may recall, rather than focusing on the features and functions that most providers deliver, this series is focused on highlighting areas that pop up as differentiators in the eyes of the more progressive practitioner organizations that we speak with. The idea is to help separate the wheat from the chaff even though we don’t know what exact flavor of bread that you’re baking.

Within the sourcing area, we will also take some additional liberties by highlighting some key functionality that might perhaps better fall into an “extended sourcing” category that transcends just traditional sourcing strategy and execution. For example, project portfolio management, savings management, performance management, stakeholder management, and other processes clearly transcend just sourcing, but from a pragmatic “on the ground” standpoint, these are often prioritized by sourcing and category management teams. They are trying to drive short-term value while trying to scale their efforts with a form of knowledge management that will support their longer-term transformation outside of episodic sourcing events and into a more end-to-end lifecycle view of progressive category management.

There are also some provider-level differentiators that transcend software feature-function nuances, and we’ll highlight these as well. OK, let’s dive in.

5 Reasons to Bet For and Against Coupa (Part 1: The Virtuous ‘Cloud’ Prince) [PRO]

One of the best validations of the procurement technology sector is to see irrational exuberance from those who know comparatively little about it as they begin to speculate more aggressively on who is going to win in the market. Hearing Cramer call Coupa the “Cloud Prince” was but one example of the dozens I’ve heard both publicly and in one-on-one conversations in recent weeks from those outside the procurement solutions world.

These days, it seems everyone has an opinion on Coupa. Sometimes this speculation and soap-boxing grates on me because, in theory, it could mislead those within procurement and finance from making the best decisions if they get wrapped up in the noise. But it’s a price worth paying. Every insider — including everyone on the front lines of procurement, every tech vendor, every consultant, every analyst — should welcome every minute of attention Coupa gets. Why? Because it means there is going to be plenty of cash to fund the next generation of innovation for the sector.

Procurement is red hot right now, and honestly, shouldn’t saving money always be hot? But just how hot is Coupa? While I have real work to do providing a final set of eyes on some 250+ pages of draft copy for the Q2 SolutionMap Insider publications this week, I thought I’d procrastinate and share my own prognostications on Coupa and the arguments I’d make on betting both “for” and “against” the new crown prince — and also offer some fantasy sports commentary on just whom I’d combine Coupa with from the comfort of my lazyboy to conclude things (and luckily our SolutionMap framework lets us mix and match providers in different combinations — something that some of our early adopter practitioner clients are starting to explore in their evaluations).

Today I’ll start with five reasons I’m bullish on Coupa for procurement organizations — the company, not the stock, which is an important distinction as I have no opinion on share prices — by sticking with Cramer’s “prince” analogy. Of course I can’t help but think back to a philosophy class in 11th grade with Dr. Morinelli where we learned and debated Machiavelli's “The Prince.”

Virtuous princes, as Wikipedia translates and paraphrases Machiavelli, “rise to power through their own skill and resources (their ‘virtue’) rather than luck … [even though comparatively they] tend to have a hard time rising to the top, once they reach the top they are very secure in their position. This is because they effectively crush their opponents and earn great respect from everyone else. Because they are strong and more self-sufficient, they have to make fewer compromises with their allies.”

How is Coupa the virtuous [resourceful] prince for procurement? Read on as we explore the five reasons I’d bet on Coupa’s continued success at the same levels of the past.

Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement [Plus+]

An increasing number of digital, platform-based service providers are appearing today, and while they now represent a small category far outside the scope of most contingent workforce and services (CW/S) procurement programs, the spend they account for is growing.

Back around 2010, traditional BPO providers sought to introduce clients to digitally turbo-charged offerings. Though similar in concept, the providers appearing today represent a whole new generation of platform-based service providers, many of which were startups or didn’t exist in 2010. They did not arise with the scale and legacy of the BPO providers, nor did they occupy the category of major service providers of which procurement was aware and already oversaw.

Far from a passing fad, these next-generation digital service providers will become an increasingly significant segment of services consumption and spend over the next 10 years. We base our projections on solid, long-term trends evidenced in both the consumer and business sectors.

This Spend Matters Plus article defines this new generation of digital service providers and poses the entirely open question of whether they require the attention of procurement organizations tasked with managing services spend at this time. This question may be especially pertinent, given the significant similarities of digital service providers and traditional ones.

Catalog Management: Technical and Functional Component Requirements (Part 5) — Catalog Contracts and Marketplace/Internet Search [PRO]

Today we conclude our multi-part research brief exploring catalog management functional and technical requirements with an emphasis on the last two requirements we consider in our SolutionMap functional requirements for e-procurement.

The first requirement that we analyze is what we term “catalog contracts,” capability which focuses on pre-negotiated pricing through group purchasing organization (GPO) arrangements, leveraged buying or otherwise third-party negotiated typically contracts outside of what a procurement organization would negotiate itself. The second area, marketplace / internet search and catalog visibility, extends the scope of catalog management capability to integration with online marketplaces (e.g., Amazon Business) and electronic commerce storefronts on the Internet, a requirement which is increasingly becoming more important in the evaluation of e-procurement solutions overall.

If you’re new to the series, check out Part 1 (overall definition/background and supplier network intersections), Part 2 (catalog creation, supplier onboarding and data quality control) and Part 3 (maintenance, workflow and analytics) and Part 4 (catalog objects/methods and catalog mobility capabilities, expectations and requirements).

Whether you’re a procurement organization, supplier, software provider or consultancy, our goal with this series is to provide the bill of materials to allow the assembly of the best possible catalog management solution, either on a unified basis with the same e-procurement platform or integrated with a broader solution.

Catalog Management: Technical and Functional Component Requirements (Part 4) — Catalog Objects and Mobility [PRO]

on-demand workforce

It’s possible to build or use a “good” e-procurement solution that has rudimentary catalog management. But it’s impossible to deliver or leverage a great one, unless its catalog management capabilities are best in class compared with the rest of the e-procurement and procure-to-pay (P2P) pack.

Based on our SolutionMap functional requirements for e-procurement, this multipart Spend Matters PRO research brief defines all of the elements of catalog management. It also provides a feature checklist of the elements that comprise each component, defining what constitutes best in class performance in each case. Today, in Part 4, we flesh out catalog objects and mobility capabilities, expectations and requirements.

Those new to this series can catch up with Part 1 (background and supplier network intersections), Part 2 (catalog creation, supplier onboarding and data quality control) and Part 3 (maintenance, workflow and analytics). Whether you’re a procurement organization, supplier, software provider or consultancy, this series provides the bill of materials to inform the assembly of the best possible catalog management solution, either on a unified basis with the same e-procurement platform or integrated with a broader solution.

From blur to Maistro: Can Services Procurement Get a Life? [PRO]

healthcare

We recently had a briefing and demo by U.K.-based Maistro, which describes itself as “an AI powered platform and dynamic B2B Marketplace that optimizes the way companies buy business services.” Formerly blur Group, the company became Maistro following a significant restructuring that took place over the second half of 2017. Spend Matters has followed the company since 2013, but our coverage tapered off over the last two years as the company's condition worsened. However, since Maistro has been operating under new leadership for almost a year now, it may be time to turn the page and start a new chapter in our coverage.

With a new tagline, “Accelerated Procurement,” Maistro goes-to-market as a procurement-oriented “managed services” solution with an integrated online marketplace that consists exclusively of vetted service supplier businesses (not freelancers). While Maistro does participate in the workforce/services game, its combined characteristics differentiate it from other online freelancer/services marketplaces, such as Upwork, Freelancer, Fiverr and others.

Nonetheless, the work/services platform space is emergent and consists of hundreds of providers, with many well-financed and still searching for the path that will lead to scale adoption by large enterprises. Consequently, it is difficult to predict which providers may find the cure or end up in a platform graveyard, if or when there is a market shakeout. One thing, however, can be said about Maistro: Despite having many near-death experiences over the last four years, it appears to be rallying — albeit with an uncertain prognosis.

Coupa’s Customer Conference and Earnings Continue to ‘Inspire’ — But a New Competitive Battle is Looming [PRO]

A few weeks back we attended Coupa Inspire 2018. The event left us with a perspective that Coupa is not only doing some things extremely well but also that it would do well not to make the same mistakes of those that came before it with a similar rise to fame (i.e., a healthier dose of competitive paranoia is always more effective than getting punch-drunk on the fame of continued growth and capital market success).

In this Spend Matters PRO research brief, we provide a summary of a number of key announcements made during Coupa Inspire 2018 and over the past 18 months at Coupa. In addition, we’ll trace the history of Coupa’s product launches and introductions to provide context on how new offerings may evolve.

We’ll also offer perspective and opinions on the trajectory Coupa has been on — including whether it is sustainable — and conclude with comments on what has become arguably the most important procure-to-pay (P2P) battleground on which Coupa is positioning itself against competitors: how to enable as close to 100% of spend under management as possible with a P2P solution at the core. Incidentally, this is a topic that Oracle and SAP (inclusive of SAP Ariba, SAP Fieldglass and Concur) also have been doing quite a bit of thinking on of late — not to mention Coupa’s partner, customer and frenemy Amazon Business.

As a follow-on to this research brief, we will later share our thoughts on Coupa’s Q1 2019 earnings report from earlier in June, including how traction (and competition) in the market is translating both to wins and losses depending on customer requirements, channel/partner influence and competitive price pressure in select circumstances. Yet it would not be the Spend Matters way unless we wrapped this commentary around five reasons to bet for or against Coupa to maintain a “top three” position in the market.

For those wanting a primer on Coupa, we encourage you to check out our Vendor Snapshot on the provider (see Part 1, Part 2 and Part 3) as well Coupa’s latest Q1 2018 SolutionMap performance in the e-procurement, invoice-to-pay, procure-to-pay and sourcing areas.

Why the Staffing and Contingent Marketplace is Failing Procurement [Plus+]

In our prior analysis of the services procurement market, we looked at the evidence showing how the staffing marketplace is failing procurement organizations. Today, we turn our attention to the “why” and the factors holding organizations back from gaining more value from their services procurement spend. This value includes greater savings, of course, but also reduced risk, increased compliance, improved talent management and recovered time to focus on innovation, continuous improvement and business outcomes.

We are not purporting any grand conspiracy of sorts here. Rather, the fundamental challenge with services procurement and the staffing industry centers on a supplier-led industry dynamic that has been able to break free from the bounds of how procurement manages all other spend areas, directing the buy-side rather than having to adjust its own sell-side driven business to maturing procurement expectations and requirements.

In this Spend Matters Plus analysis, a refresh of our 2014 series, we consider the “why” of the problem and go beyond the standard “fox watching the henhouse” issues with the traditional MSP/staffing market. Finally, to conclude this series, we will offer a prescription for changing the market from the inside out with procurement-led initiatives.

So You Want to Buy Spend Analytics — Beyond Spend Cubes (Part 2) [PRO]

Analytics

In the first installment of this series, we outlined a handful of the key product differentiators that winnow the provider playing field down to those that can meet your needs. Today in the second part of this series, we’ll finish the discussion by moving into some extended spend analytics (i.e., beyond forensic spend history reporting) and broader supply analytics that are worthwhile to consider.

Why focus beyond basic spend analytics? The answer is simple: to find more value opportunities. And you don’t want to run out of runway with your current provider if you want to evolve your analytics journey beyond analyzing the “exhaust” of your value chain (i.e., spend).

But if you want to extract more value from your spend, you have to extract more insights around demand and from “supply” (i.e., categories, suppliers, costs and multitier value chains). With that, let’s dive into these areas.