Plus or PRO Content

SpendHQ Vendor Snapshot 2020 Update: Part 3 (SWOT, Vendor Comparisons, Selection Tips, Analysis) [PRO]

Part 3 of this Spend Matters PRO Vendor Snapshot 2020 Update on SpendHQ will have a company-level SWOT analysis, vendor comparisons, a user selection guide, and insider evaluation and selection considerations. The update series builds on our 2016 review of the spend analytics firm started by Insight Sourcing Group (ISG).

Part 1 provided a history and overview of the SpendHQ spend analysis platform. Part 2 focused on the strengths and weaknesses of SpendHQ’s solution.

Now let’s look at more analysis and see how SpendHQ compares in the market to vendors and solutions like Coupa Spend360, Jaggaer, GEP, Synertrade, AnyData, Orpheus IT, Sievo, Simfoni and Suplari.

2020 Procurement Predicaments and Predictions — Part 1 (Series Wrap-Up) [PRO]

As the first month in 2020 is drawing to a close, the holiday season is a distant memory and sleeves are being rolled up in earnest. As such, we’ll wrap up the Spend Matters analysts’ 2020 procurement predictions series for PRO subscribers as we look forward to this new year and new decade. We’ll first do a quick recap of our predictions in six procurement technology areas:

* Sourcing, by analyst Magnus Bergfors
* Supplier Management (SXM), by Magnus Bergfors
* Contract Lifecycle Management (CLM), by analyst Nick Heinzmann
* P2P (Procure to Pay), by analyst Xavier Olivera
* Services Procurement, by analyst Andrew Karpie
* Procurement Analytics, by analysts Michael Lamoureux and Pierre Mitchell, the series editor

For a discussion of problems in each of these areas, see the analysts’ non-subscription posts about the predicaments per category.

In this PRO brief, we’ll address some of the foundational platform elements and broader market shifts that are happening regarding areas such as low-code/no-code platforms, open source, AI, bots, mega-vendor ecosystems, microservices, analytics and other areas. These digital capabilities aren’t just happening in a vacuum, but rather, responding to:

* buyer needs for increased agility, innovation and market options to move at the pace of broader digital business transformation, but also more focused procurement needs for better analytics, supplier engagement, commercial excellence, category intelligence, etc.
* supply market changes as M&A and an influx of private equity is chasing new opportunities — especially related to AI and specific areas that are still decidedly problematic, such as services procurement, tail spend management (and guided buying), category-specific functionality, master data management and other areas.

So, in keeping with our series, let’s dive into the forecast scenarios where we think the market will respond to these buyer needs/predicaments.

SpendHQ Vendor Snapshot 2020 Update: Part 2 (Strengths & Weaknesses) [PRO]

Part 2 of this Spend Matters PRO Vendor Snapshot 2020 Update focuses on the strengths and weaknesses of SpendHQ’s solution and builds on our 2016 review of the spend analytics firm started by Insight Sourcing Group (ISG).

Spend Matters has described SpendHQ’s capabilities as quite unlike any other spend analysis solution in the market today. Since the launch of its initial spend visibility product, SpendHQ has added compliance management, supplier information management and visibility, do-it-yourself reporting and opportunity insights — the latter capabilities being quite unique and one of the few tools that can enable procurement organizations to avoid the need to invest in all but the most complex gain share recovery audits after the fact, a topic we will discuss in Part 2 in this series.

And, this year, SpendHQ released its second major revamp to the SpendHQ platform where it improved the core and completely redid the UX to provide buyers with the insights they need to make more meaningful decisions front-and-center immediately upon login. In addition, the new UX supports best-in-class do-it-yourself report building on par with the best stand-alone spend analysis and BI tools and real-time drill down that can take a buyer to just the data and/or transactions they want to see when they want to see it — from anywhere in the product.

Part 1 provided a history and overview of the SpendHQ spend analysis platform. And Part 3 will have a company-level SWOT analysis, competitive alternatives, a user selection guide, and insider evaluation and selection considerations.

Now let’s look at the strengths and weaknesses.

SpendHQ Vendor Snapshot 2020 Update: Part 1 (Company Background, Solution Overview, Selection Checklist) [PRO]

This Spend Matters PRO Vendor Snapshot 2020 Update builds on our 2016 review of SpendHQ. Part 1 of this update provides a history and overview of the SpendHQ spend analytics platform, and can begin to help procurement organizations decide whether SpendHQ is a good shortlist candidate for their analytics needs. Part 2 will focus on product strengths and weaknesses. And Part 3 will have a company-level SWOT analysis, competitive alternatives, a user selection guide, and insider evaluation and selection considerations.

SpendHQ’s parent company, Insight Sourcing Group (ISG), was founded in 2002. ISG has its roots in delivering savings to clients on a consulting basis through strategic sourcing and related procurement transformation, category management and operational cost-reduction programs. It has always had a unique approach to driving category savings, and has, for example, eschewed reverse auctions and traditional e-sourcing tools throughout its past (and this despite a strong technology prowess).

Spend analytics would prove different than e-sourcing technology, however. Yet ISG did not set out to build a standalone analytics package from the start — it began by building an application for its internal use, in large part because third-party spend analysis tools did not meet its requirements. Yet rather quickly, the internal would become the external. The story follows a logical progression:

* As more and more customers saw the reports (developed internally with the tool), and results and reporting they delivered, they requested access directly. After prodding, ISG built a viewer that clients could use to track and keep on top of their spend.
* When customers saw the data and the insights that could be derived if their buyers could drill in and explore in-house, they asked if they could leverage the technology themselves to drive their own sourcing and category management efforts. Finally, in 2012, ISG decided to productize the solution and SpendHQ was formed — and, of course, they brought in developers with expertise in analytics to help them build the application.
* SpendHQ became a complete cloud-based SaaS spend analysis and visibility offering that was being used by a number of clients, including some Fortune 500/Global 2000 companies out of the gate.
* By 2016, SpendHQ appeared to be winning as many spend analysis deals (if not more) than other procurement technology firms …
* … but the do-it-yourself reporting capability was extremely limited (to customizing what SpendHQ had already produced), opportunity insights were limited to pre-defined categories, and mapping fixes still required SpendHQ. … SpendHQ was starting to fall behind in technology, so they brought in a platform/product management expert in 2017 (in the form of David Bush, former CEO of Iasta that sold to Selectica and then became part of the Determine platform) to help them build a product, with a company behind it, to rival its current, and future, best-of-breed peers.
* Now, in 2020, they have released a complete overhaul of the platform that has most of the benefits the platform had before with best-of-breed do-it-yourself reporting, opportunity insights across the entire spend-base, and better AI categorization with the ability for users to define overrides on supplier and transaction mapping.

While this is only the second real “deep dive” that the author has written about SpendHQ, the Spend Matters team can vouch that the product is solid. Both the author and Spend Matters Founder Jason Busch have been evaluating release versions since SpendHQ’s very early days, tracing its evolution and providing critical feedback in its early years. We’ve also written about it on a regular basis since 2014, the year that SpendHQ was first named to the Spend Matters 50/50 list.

Since the launch of its initial spend visibility product, SpendHQ has also added compliance management, supplier information management and visibility, do-it-yourself reporting and opportunity insights — the latter capabilities being quite unique and one of the few tools that can enable procurement organizations to avoid the need to invest in all but the most complex gain share recovery audits after the fact, a topic we will discuss in Part 2 in this series.

And, this year, SpendHQ released its second major revamp to the SpendHQ platform where it improved the core and completely redid the UX to provide buyers with the insights they need to make more meaningful decisions front-and-center immediately upon login. In addition, the new UX supports best-in-class do-it-yourself report building on par with the best stand-alone spend analysis and BI tools and real-time drill down that can take a buyer to just the data and/or transactions they want to see when they want to see it — from anywhere in the product.

Over three updated installments, we will dive deep into the new platform, its strength and opportunities for improvement, and how SpendHQ compares to other vendors in the market.

2020 & Direct Sourcing of Workforce/Services: What to Know [PRO]

Direct sourcing of workforce/services (DSW/S) has been one of the most consistent, rising trends in the evolving contingent workforce/services (CW/S) procurement space in recent years. To a limited extent, the sourcing of contingent workers with little or no involvement of third party intermediaries has been practiced by most organizations for decades. But more recently, it has been changing in several ways, driven by a number of factors, including the emergence of fit-for-purpose technology. It is no coincidence, therefore, that there is a Spend Matters SolutionMap category — Direct Sourcing of Workforce/Services — that currently ranks nine technology solution providers (with more set to participate).

While the idea of sourcing and engaging workers directly (e.g., not through a traditional staffing supplier arrangement) seems simple enough, there are various forms that direct sourcing takes (depending upon the business use case) and a variety of ways that technology is being used to enable it. In that respect, it is not that simple. But it is something CW/S practitioners should be following — and probably getting prepared to evaluate — in 2020.

This Spend Matters PRO brief explains direct sourcing of workforce/services (DSW/S) in the context of 2020 and provides input for practitioners trying to understand how direct sourcing applies in their own specific business contexts/use cases. It discusses the considerable diversity of solution providers/solutions (based on our SolutionMap data and other observations) and how that diversity is relevant to supplier shortlisting and selection (including the role of the Spend Matters’ DSW/S SolutionMap framework).

Beyond the Traditional SRM Scorecard: Supplier Management Metrics to Diagnose Your Supplier Management Operations (Part 1: Search and Enablement) [Plus+]

Editor's note: This is a refresh of our 2017 series on supplier management metrics, which originally ran on Spend Matters PRO.

In recent years, prominent procure-to-pay (P2P) providers have increasingly offered opt-in peer benchmarking capabilities. This newly available data has changed the way consultants and advisors evaluate procurement performance. Benchmarks and key performance indicators (KPIs) once analyzed on a periodic basis, for instance, are now becoming embedded into procurement processes and continuously updated with new information as it becomes available.

Because of this, procurement organizations are becoming increasingly aware of the benefits measuring performance based on a standard set of benchmarks and KPIs can bring to overall P2P performance. Yet the same cannot be said of supplier management activities, despite the significant cost and risk they pose to procurement. In fact, Spend Matters has found that most procurement organizations are not yet measuring a complete set of KPIs to manage the lifecycle of supplier activities and associated supplier information. Solution providers have not helped this situation, either, instead glossing over supplier management in favor of KPIs and peer benchmarking services in core transactional procurement areas.

It’s time to change this. To give procurement organizations operational metrics that mirror the KPIs available in P2P, this multipart Spend Matters PRO series provides an action guide for measuring and quantifying some of the benefits of "day in the life" operational supplier management activities. It also provides a roadmap and foundational input for building a business case to support these initiatives, including investments in dedicated technology solutions and tactical KPIs for managing them.

Part 1 of this series offers diagnostic KPIs for self-assessing supplier search and enablement performance. For each metric, we include commentary and insight on why it matters to procurement, guidance on enablement and measurement, suggestions for procurement technology systems that can be used for support and variable inputs for tracking.

We also encourage all Spend Matters readers, including non-Spend Matters PRO subscribers, to download our recent 2017 landscape definition and overview on supplier management and supply risk management, which provide details on the different technical components of these solution areas.

2020 Predicaments and Predictions in Procurement Analytics: What’s Likely, What’s Revolutionary [PRO]

It shouldn’t be a big shock to learn that procurement analytics is a big deal right now. After procurement organizations have built some basic spend cubes (or “spent cubes”) and dashboards, they’re looking for deeper predictive insights into spend, contracts, suppliers, costs, process improvements, supply risk and other areas. In fact, analytics was by far the most cited technology area expected to have a business impact within the next two years by CPOs surveyed in the recent 2019 Deloitte Global CPO Survey.

The biggest area of interest within analytics have been:

* Self-service analytics/visualization for business stakeholders and procurement staff
* Predictive analytics for power users (e.g., for price/cost/volume forecasting)
* Performance analytics and dashboards (e.g., supplier scorecarding, category dashboards, etc.)
* Support for digital initiatives such as AI/machine learning (which is usually about focused predictive analytics problems), RPA (that either requires some analysis within a process or conversely is about helping to automate the analytic workflows), or big data analytics (e.g., using IoT sensor data from the supply chain)

The Predicaments
However, while analytics are hot, the implementation barriers can be stone cold killers:

* Poor data quality. 40% of CPOs cited the inability to generate insights and analytics because an even greater number (60%) cited poor master data quality, standardization, and governance.
* The master data quality problem is very familiar to practitioners who run any type of analytics that have to do with suppliers, items and contracts — i.e., most of them!
* Some ERP suites and procurement suites have fragmented master data within their product lines, and nearly all these solutions don’t have master data that can be used as part of an MDM-type solution (e.g., having a supplier master that can serve a true SIM solution from an MDM standpoint rather than just creating another vendor master file to add to the heap).
* Generating forward-looking insights based on external data and intelligence rather than just simple spend forensics — especially category-specific insights that are typically built from scratch.
* The struggle to create analytics that go beyond off-the-shelf operational reports from the various modules/tools in the market.
* Dashboards that are attractive, but can be visually overwhelming and not help you prioritize where the key opportunities are.
* IT organizations that may be pushing legacy data warehouses and BI tools that don’t allow more democratized analytics to be developed with an increasingly digitally savvy generation of business users and tools (that might also need to get adopted by an older generation of procurement practitioners). Data visualization and predictive analytics were the top two digital skills prioritized for procurement technology training over the next year.

In the rest of this Spend Matters PRO brief, we’ll dive into the current and future state of the procurement analytics area, and make some predictions about what we expect to see in 2020 from a market standpoint, but also a more detailed technical standpoint.

How to Make Your Procurement Organization like Amazon — Use the Flywheel! [PRO]

Many smart readers will be familiar with the Amazon flywheel. It is a graphical representation of Amazon’s business model that you can read about on this blogpost here.

The model from that post is shown below:



Source: http://www.samseely.com/blog/2016/5/2/the-amazon-flywheel-part-1

The graphic generally shows the self-reinforcing cycles of how Amazon’s focus on customer experience and product selection help drive demand — which in turn attract sellers while also then letting Amazon gain economies of scale (and also “economies of scope” when it jumps into adjacent markets) to then self-fund (i.e., re-invest all the profits) the offering of lower pricing AND the development of even better customer experiences … which then repeats the cycle continuously.

This graphical model is an oversimplification because there other things at play here:
* disintermediation in the supply chain to capture value
* building/buying capabilities to jump into adjacent markets
* driving not just experience and eyeballs, but also monopolistic power in categories
* acquisitions to accelerate category dominance
* subscription-based bundling and related incentives (“free” shipping with Amazon Prime)
* playing 3D chess by playing different roles — e-tailer, wholesaler, marketplace, platform — and then using that power with upstream suppliers
* speed to value and focused/driven/intense organizational culture on mission and results

I’m sure you could add more to the list above. That said, procurement and supply chain professionals understand many of these drivers when they look at supplier power and category strategy — especially when one of those suppliers may be Amazon (e.g., AWS)!

Many procurement organizations often have a difficult time expressing their organizational value-add to other stakeholders, or they end up focusing too narrowly just on cost savings. They need to be able to communicate higher impact value creation and also create some “branding” surrounding their spend/supply management services. So, they should consider adopting the Amazon flywheel to their organizations, and there are actually three ways in which they can do this:

* Apply the Amazon flywheel to the broader organization and then dovetail in how procurement helps to support the business flywheel. Most organizations want to be like Amazon in some respects, so this can help reinforce that.
* Apply the flywheel to the procurement organization as a spend/supply management “business” in its own right and then tweak the Amazon flywheel model to create a self-funding procurement flywheel.
* Apply the flywheel to sourcing, category management and supplier management as you engage suppliers.

In other words, change “growth” to “profitable growth” and then change “sellers” to “suppliers” and you get the general idea.

In the rest of this Spend Matters PRO research brief, we’ll share our adaptation of the Amazon flywheel to a “procurement flywheel” that procurement organizations (and to the digital solution/service providers who help support them) can adopt for themselves and their stakeholders.

For any qualified practitioners interested in this PRO content, please feel free to reach out to us and we can make it available to you if you’re looking for support in your digital transformation.

2020 Predictions in Supplier Management: 5 Areas for Improvement in SXM [PRO]

In our other post today on SXM predicaments in 2020, we discussed some of the current predicaments around supplier management centered on supplier data, supplier segmentation and category management.

To address these issues, buying organizations need to get serious about supplier data management as well as overall supplier management strategies. Unfortunately supplier management is often a secondary responsibility for procurement organizations where the focus tends to be on sourcing and delivering savings. The exception is in some cases in the IT space where some organizations have established vendor management offices (VMOs) to manage the more strategic and critical supplier relationships.

The sourcing and savings focus also results in a lack of interest in making sure that supplier data is managed correctly. Onboarding suppliers often falls to accounts payable organizations whose focus is on making sure that the vendor master data is accurate from a standpoint of getting invoices paid and preventing fraud.

More mature organizations have, however, realized that suppliers need to be managed (not only sourced) and that there is an enormous amount of value to be realized through better supplier management and collaboration — as well as, in some cases, co-innovation.

But we also need improvement in the applications and technology to support this. In this Spend Matters PRO article, we will explore five predictions in how we think applications and the SXM market will evolve to meet these challenges and help procurement organizations manage their  suppliers better.

2020 Predictions for Strategic Sourcing: Continuous Analysis Needed for Category Management [PRO]

In today’s Spend Matters post about predicaments in strategic sourcing, we talked about the missing support of category management in existing e-sourcing solutions. The result of this is a lack of connection between the category management strategy and the tactical execution of sourcing events, which leads to a fragmented execution of the overall sourcing and procurement strategy.

To truly transform procurement you need to start from the top by defining your category management framework, then create the actual category strategies based in this framework and finally cascade this down into sourcing events as applicable. This is obviously doable without having a system to support it, but then, in my experience, you run a significant risk of creating category strategies once a year that you then put away and don’t look at until next year when it’s time for an update. By using a tool that has contract data, spend data and supplier management data (natively or through integration), you could create a dashboard that would support the continuous analysis of trends, risk, demands or supply changes. The defined strategy should also guide you to the right type of sourcing event with the right category-specific features and configuration.

Creating this type of solution is obviously not easy, especially the category strategy part, but we are seeing some interesting developments in the market and hearing some interesting things from vendors, and linking e-sourcing to category management is the next logical step in the evolution of sourcing technology.

In this Spend Matters PRO brief, we’ll look at a number of developments about how we believe this will play out.

Invoice-to-Pay Tech Selection and the ‘CIO Friendly’ Persona: Analysis & Commentary [PRO]

The market for invoice-to-pay solutions, much like e-procurement, has grown in size and relevance to procurement organizations in recent years. We even expect the I2P market will begin to rival the EDI-based world in the 2020s, eventually overtaking it.

Despite this rapid growth, the total number of providers in this space will likely remain relatively small. As leading I2P solutions continue to grow their supplier networks, their increased clout, based on their ability to connect more and more buyers and suppliers, will impede new providers from breaking into the larger I2P market.

Yet competition will come from other fronts.

Procure-to-pay solution vendors, for example, have begun to invest significantly in developing the I2P half of their suites, rounding out transactional shopping/ordering capabilities with functionality for invoice processing and, in some cases, basic payments support. This could create competitive pressure on I2P specialists in tech selection scenarios where access to end-to-end P2P capabilities are an important criterion.

Similarly, AP automation solutions are taking a bite out of a different customer base altogether: the long underserved middle market. Small and medium-size businesses are increasingly seeing benefits to adopting software that automate invoice receipt, capture and validation processes (sometimes inclusive of payments execution), yet these customers also seem to be satisfied with an 80%, “good enough” solution in terms of functionality. This creates a new competitive dynamic for I2P solutions looking to move down market, as decisive tech selection criteria may revolve more around usability and collaboration features than supplier network breadth.

Given these different competitive fronts and the evolving needs of this market, how can companies with different technology requirements evaluate invoice-to-pay solutions amid an array of vendors with varying degrees and kinds of capabilities?

Spend Matters’ SolutionMap accounts for these differences using a persona-based approach. Each SolutionMap persona is calibrated to weight evaluation requirements so that it reflects the profile of certain kinds of buyers. For example, the “Nimble” persona reflects small and medium-size businesses that prioritize fast time-to-value and ease of use in the selections; the “CIO Friendly” persona emphasizes technical foundation and interoperability with other enterprise systems to make for a straightforward implementation.

So, what do SolutionMap personas look at in the Invoice-to-Pay rankings, and how can they help your organization make better technology decisions?

In this Spend Matters PRO series, we’ll analyze the invoice-to-pay market using our five I2P personas: Nimble, Deep, Turn-Key, Configurator and CIO Friendly. (See persona definitions* below.)

This review is organized just like our RFI for SolutionMap, according to these topics: platform capabilities, services, features & functionalities, and customer value.

Let’s look at the invoice-to-pay features and vendors as viewed the CIO-Friendly persona.

Invoice-to-Pay Tech Selection and the Turn-Key Persona: Analysis & Commentary [PRO]

The market for invoice-to-pay solutions, much like e-procurement, has grown in size and relevance to procurement organizations in recent years. We even expect the I2P market will begin to rival the EDI-based world in the 2020s, eventually overtaking it.

Despite this rapid growth, the total number of providers in this space will likely remain relatively small. As leading I2P solutions continue to grow their supplier networks, their increased clout, based on their ability to connect more and more buyers and suppliers, will impede new providers from breaking into the larger I2P market.

Yet competition will come from other fronts.

Procure-to-pay solution vendors, for example, have begun to invest significantly in developing the I2P half of their suites, rounding out transactional shopping/ordering capabilities with functionality for invoice processing and, in some cases, basic payments support. This could create competitive pressure on I2P specialists in tech selection scenarios where access to end-to-end P2P capabilities are an important criterion.

Similarly, AP automation solutions are taking a bite out of a different customer base altogether: the long underserved middle market. Small and medium-size businesses are increasingly seeing benefits to adopting software that automate invoice receipt, capture and validation processes (sometimes inclusive of payments execution), yet these customers also seem to be satisfied with an 80%, “good enough” solution in terms of functionality. This creates a new competitive dynamic for I2P solutions looking to move down market, as decisive tech selection criteria may revolve more around usability and collaboration features than supplier network breadth.

Given these different competitive fronts and the evolving needs of this market, how can companies with different technology requirements evaluate invoice-to-pay solutions amid an array of vendors with varying degrees and kinds of capabilities?

Spend Matters’ SolutionMap accounts for these differences using a persona-based approach. Each SolutionMap persona is calibrated to weight evaluation requirements so that it reflects the profile of certain kinds of buyers. For example, the “Nimble” persona reflects small and medium-size businesses that prioritize fast time-to-value and ease of use in the selections; the “CIO Friendly” persona emphasizes technical foundation and interoperability with other enterprise systems to make for a straightforward implementation.

So, what do SolutionMap personas look at in the Invoice-to-Pay rankings, and how can they help your organization make better technology decisions?

In this Spend Matters PRO series, we’ll analyze the invoice-to-pay market using our five I2P personas: Nimble, Deep, Turn-Key, Configurator and CIO Friendly. (See persona definitions* below.)

This review is organized just like our RFI for SolutionMap, according to these topics: platform capabilities, services, features & functionalities, and customer value.

Let’s look at the invoice-to-pay features and vendors as viewed by the Turn-Key persona.