PRO Content

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 6: Acquisition Strategy and the ‘End Game’) [PRO]

In this Spend Matters Nexus series, we’ll go over Tips 14 and 15 as we continue to explore the ways for sellers to maximize private equity, investment and strategic buyer outcomes in the procurement solutions market and others. Now, let’s turn our attention to two areas: the importance of fleshing out an acquisition strategy and roadmap — and “knowing the end game” in terms of likely future buyers after the next phase of the company’s growth. In our exploration, we share the best practices and not-so-best practices that we have observed across the hundreds of transactions we have been involved in.

So far in this Nexus series, we’ve covered the initial 13 of 20 tips (see Part 1 , Part 2, Part 3, Part 4 and Part 5). Let’s check out Tips 14 and 15 now.

Jason Busch is the Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

Procurence Vendor Introduction (Part 2: Strengths/Weaknesses, SWOT, Selection Checklist and Market Overview) [PRO]

In Part 1 of this two-part Spend Matters PRO series, we introduced you to Procurence — a relatively new entrant to the global direct material supplier management space, based out of Warsaw, Poland. It’s a recent entrant to our SolutionMap ranking of vendors, where its scores make it a customer leader in the SRM category. While still a small player, its solution already has a lot of the breadth of more established players like Jaggaer Direct (Pool4Tool), Ivalua (Directworks) and Allocation Network. Procurence’s utilization has been growing tenfold year-over-year by its buy-side user base of over 10,000 users and supply-side user base of over 30,000 users. Whether it has everything your organization needs, however, will come down to your mix of direct vs indirect, and how similar your needs are to its existing client base, which it has been developing its Meercat solution with for the past seven years.

While Part 1 of this brief provided some background on Procurence and a high-level overview of its offering, Part 2 will provide a breakdown of what is good (and not so good) about the solution, a high-level SWOT analysis and a short selection requirements checklist that outlines the typical company for which Procurence might be a good fit.

Procurence Vendor Introduction (Part 1: Background and SRM Solution Overview) [PRO]

direct materials sourcing

Supplier management is one of the most misunderstood terms in the procurement solution space, especially since the exact scope of processes supported by such systems varies by analyst, vendor and customer interpretation. In order to clarify, or at least differentiate, many vendors have begun slicing and dicing the SXM solution space to offer the likes of:

* Supplier Discovery Management: that help an organization identify potential new suppliers that can help it meet its products, services, diversity and/or sustainability requirements
* Supplier Information Management: that can help a supplier track all of the information it collects on a supplier, including locations, employees, products, services, certifications and certificates
* Supplier Performance Management: that can track not only supplier information but also relevant performance data on quality, reliability, delivery, invoice accuracy and sustainability
* Supplier Relationship Management: that includes not only performance data but also functionalities to manage the relationship, such as capabilities for supplier development, collaboration and innovation management
* Supplier Network Management: that can support supplier discovery but are primarily designed to support transactions (through e-document and e-payment exchange) with suppliers on the network
* Supplier Quality Management: that includes specialized capabilities to support direct materials procurement, including the management of non-conformance cost of poor supplier quality, and general quality management
* Supplier Risk Management: that includes the capability to gather multiple sources of risk data (financial, environmental, regulatory, geographic, etc.) and provide an overall risk profile

Very few vendors do more than half of this, at best, so when evaluating a supplier management software vendor, it's important to understand what fraction of this they do and whether that fraction is relevant to your business.

We'll take, for example, supplier quality management — this goes well beyond supplier performance management because it's not just tracking defect rates, uptime / reliability statistics, etc. but managing the quality process from the beginning of production to delivery of the product to the consumer. Ensuring the materials that are being sourced are of the appropriate standards and tested on receipt, that the appropriate production process is followed, that the machines are regularly tested, that the outputs are spot tested, securely packaged, and delivered to spec. Such a system should support ISO (International Standard Organization), ASQ (American Society for Quality) processes, Six Sigma, 8D Reports (based on Eight Disciplines methodology), and/or QDX (Quality Data eXchange). Very few solutions come close to this, even if they are designed for supporting direct procurement.

And while Procurence may not do all of this, it is one of the few supplier management solutions on the market that tackles quality management in addition to information, performance and risk, as well as aspects of relationship management.

Procurence was founded in 2009 in Warsaw, Poland, to provide tools to help buyers achieve transparency in their supply base, decrease supply risk, and streamline internal supplier management and communication processes.

This Spend Matters PRO Vendor Introduction offers a candid take on Procurence and its supplier management capabilities. (Non-supplier management specific capabilities are excluded.) Part 1 includes a short company overview and a detailed look at Procurence’s offering. Part 2 will provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, a short selection requirements checklist that outlines the typical company for which Procurence might be a good fit, and some market implications and takeaways.

Oracle Procurement Cloud Update — The Sleeping Giant is Waking Up [PRO]

Spend Matters attended Oracle’s recent OpenWorld conference to see the latest developments in its cloud ecosystem, especially within Oracle Procurement. Oracle continues to make progress in its strategy of transforming from a technology and products company to one of cloud services. It was a decision that has taken time to develop, but without a doubt this vision is beginning to crystallize as a unified solution within the Oracle Cloud (aka Oracle Fusion) technology platform.

In this Spend Matters PRO article, we will discuss:

* Oracle’s overall cloud strategy and its relevance to procurement
* Latest Oracle procurement product updates and plans
* Analysis of Oracle’s methodical progress in a dynamic market, and what it can teach SAP Ariba (and vice versa)
* Opportunities and emerging progress in platforms and “business networks”

Application-wise, Oracle is a slow and steady provider of cloud-based procurement applications, with a strength in P2P (as evidenced in its performance in our most current P2P SolutionMap ranking). And it’s making progress in its strategic procurement application areas — especially in contract management, where its solution is surprisingly strong relative to non-best-of-breed CLM players. But the game in the market is shifting beyond applications toward open platforms and ecosystems.

Can Oracle seize the opportunity? We’ll discuss...

Procurement Consulting Analysis: A review of KPMG’s procurement systems/technology practice [PRO]

consulting

KPMG is a noted procurement solutions and technology consultancy, with a large, mature and experienced global practice for systems integration (SI). It has developed working relationships with a range of technology firms, including Coupa, Ivalua, SAP Ariba, Oracle and most recently GEP. It has hundreds of customer deployments under its belt.

This Spend Matters PRO analysis provides background on KPMG’s systems integration/technology practice in the procurement solutions market. It includes facts and figures, like a list of how many people at KPMG are trained to implement each tech firm’s solution. But, primarily, this PRO analysis highlights the voice and experience of KPMG’s clients. We also offer data-driven recommendations and analysis for organizations considering KPMG as a systems implementation and consulting partner.

This report is based on extensive primary research by our Spend Matters team and from our SolutionMap’s customer reference process, where real-life customers share their vendor experiences and help us rank vendors. Spend Matters surveyed a range of KPMG clients in Q2 and Q3 2019, collecting qualitative and quantitative insights from organizations that had gone through implementations, change management, transformation and related initiatives as part of procurement technology deployments. KPMG also provided facts and figures about its practice directly to Spend Matters.

Utmost’s Extended Workforce System: What’s Behind It, What Is It and What Does It Mean for Enterprises? [PRO]

It is important for enterprises to have a handle on the whole of their contingent (or extended) workforce. Not just temporary workers supplied by staffing firms, but also workers that are engaged through service providers (ranging from building maintenance companies to management consulting firms and BPOs ). And then there are the independent and freelancer workers of all kinds, however they are classified.

A new workforce technology start-up, Utmost, thinks it’s very important to enterprises — and workers too. The company recently announced the launch of its core platform, Utmost Extended Workforce System, and an $11 million series A round led by Greylock Partners and a partnership with Workday Ventures. The company, with offices in San Francisco and Dublin, was founded by two former Workday executives and a former Groupon technologist.

With respect to where there is a critical gap in the solution marketplace, the co-founder and CEO of Utmost, Annrai O’Toole, said in a recent announcement: “With hundreds of millions of extended workers engaged with companies today, there is an undeniable shift happening, yet it is clear that businesses need new, seamless solutions to transparently manage this population.”

Greylock partner Sarah Guo offered a starker assessment of the gap in the market: “Companies in every sector engage with an extended workforce, but the rigid and clunky systems used to manage that workforce are stuck in the past. Utmost is a cloud solution for the modern, flexible enterprise, and offers a worker-centric approach to manage this population that enterprises previously lacked.”

To be clear, Utmost is building an advanced open-technology platform that will be valued by enterprises right out of the gate. But, just as important (if not more so), the company is also taking a “worker-centric” approach, starting with easy-to-use mobile apps and efficient engagement workflows for external workers (and it is also working on delivering a set of enabling services to these often severely underserved workers).

In this PRO brief, Spend Matters examines the conditions that are creating a demand for a solution like Utmost Extended Workforce, provides an explanation of the solution and looks at what it means for enterprises.

Defining AP Automation Functional Requirements (Part 5: Payment Options and Early Payment Financing) [PRO]

BuyerQuest

In the last installment of this five-part Spend Matters PRO series on accounts payable automation, we’ll list the functional requirements for payment options, like P-cards and financing programs.

AP automation capabilities vary dramatically between different software providers, and the capabilities a finance or procurement organization will require to support the automation of AP processes also vary materially, based not only on company size but a broad range of other factors. These include organizational complexity, invoice capturing requirements (e.g., paper, PDF, electronic, etc.), systems complexity, systems integration, industry, EDI integration/support, payment/financing capabilities, treasury integration/working capital management, geography and compliance requirements — to name just a few.

To understand how different providers stack up against these (and other) categories of requirements, the quarterly Invoice-to-Pay SolutionMap Insider report can provide significant insight. And to create a one-to-one map between business requirements for AP automation and vendor functionality capability, SolutionMap Accelerator can dramatically speed up the vendor shortlisting and selection process, even allowing companies to “skip the RFI” entirely.

This series defines AP automation requirements from a functional perspective to put AP, finance and purchasing professionals in the driver’s seat when they evaluate the available supply market for AP automation to fit their needs (either on a standalone basis or as a specific component of broader invoice-to-pay, procure-to-pay or source-to-pay solutions). Click to see our SolutionMap rankings of vendors in each category.

Part 1 of this series investigated core invoicing requirements for AP automation and some of the criteria that Global 2000 and middle market organizations should consider when selecting solutions (i.e., invoicing set-up, paper scan/capture support and e-invoicing).

In Part 2, we turned our attention to an additional set of AP automation functional requirements, including AP process, invoicing validations, workflow, collaboration and integration requirements.

In Part 3, we looked at the final set of AP automation topics: invoicing mobility, invoicing compliance and invoicing analytics.

In Part 4, we examined AP automation functions related to payment systems and methods, payment partnerships, payment processing and payment analytics.

Now, let’s look at payment options and early payment financing.

Negotiatus: Vendor Introduction (Part 2 — Product Strengths and Weaknesses, SWOT, Selection Checklist) [PRO]

e-invoicing

In our last Spend Matters PRO brief, we introduced you to Negotiatus, an upstart P2P provider out of New York City that’s offering a fresh take on how to solve the root causes of common purchasing headaches. Taking the view that procurement should route users and payments through one (consolidated) invoice approach, Negotiatus aims to help its customers drastically reduce the number of transactions they need to process. In this view, purchasing automation represents a symptom of dysfunction rather than a panacea to inefficient business processes, and many of Negotiatus’ strengths thus reflect its guiding philosophy of simplicity and elimination of unnecessary work.

This approach, complemented by its supporting technology and rapidly growing client base, was a central reason we named Negotiatus to this year’s inaugural Future 5 list, which highlights standout start-up companies in procurement technology. 

But such a philosophy may not be a fit for every procurement organization, and by its own admission, Negotiatus is often a better fit with younger, more “forward-thinking” procurement organizations than corporate stalwarts. Its functionality lags accordingly when compared with peers that strive to “check the box” on requirements expected by a more classically minded procurement group.

Part 1 of this brief provided some background on Negotiatus and an overview of its offering — from ordering/shopping and catalogs to invoicing and payment.

In Part 2, we will provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis and a short selection requirements checklist that outlines the typical company for which Negotiatus might be a good fit. We also give some final conclusions and takeaways.

Negotiatus: Vendor Introduction (Part 1 — Background and Solution Overview) [PRO]

The market for standalone e-procurement and P2P solutions appears to be entering a new act. After a wave of consolidation soaked up multiple best-of-breed providers (e.g., Verian, Puridiom, Aquiire), suite solutions took control, leaving only a handful of standalone alternatives. But now a new class of purchasing solutions is entering the market, each looking to disrupt the standard approaches to corporate procurement in their own way.

Some focus heavily on updating user experience and driving fast time-to-value. Others position their tools as a means to tackle specific problems (e.g., tail spend) or vertical-specific requirements. But generally the approach relies on a common theme: To win in the P2P market, new solutions need to do something different. Rather than accept the status quo of how procurement is done, many of these companies hope to offer a fresh take, whether that’s through how the technology is designed or how the business model can enable new approaches to purchasing.

This mindset applies to Negotiatus, the subject of this Spend Matters’ PRO Vendor Introduction. Based in New York City, Negotiatus is technically a P2P solution — that is, it supports ordering/shopping, catalogs, invoicing and payment, so in effect the whole P2P cycle — but it does not take a “check the box” approach to feature/function development. Instead, the founders decided to assess the root causes of common P2P problems and develop a solution that could eliminate them, rather than simply alleviate them. This approach works for some organizations better than others, but for clients such as Soul Cycle, Zeus Living and Cozen O’Connor, it’s a radical idea that can cut user ordering by as much as 75% and generate 8% median savings, according to Negotiatus.

This Vendor Introduction offers a candid take on Negotiatus and its capabilities. The first part of this series includes a company introduction and an overview of Negotiatus’ offering. The second part of this brief provides a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, and some market implications and takeaways.

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 5: Bankers, Added Metrics and Differentiation) [PRO]

In this Spend Matters Nexus brief, we’ll look at Tips 11, 12 and 13 (out of 20) for maximizing seller outcomes for private equity, investment or strategic transactions.

Collectively, the Spend Matters team has analyzed hundreds of solution providers in the past two decades from a corporate development and private equity lens. We’ve also been involved on the other side of the transaction table as well, with sellers. Based on that experience, this series represents the comprehensive advice we would give sellers before a transaction to achieve the most advantageous outcome.

Today, we turn our attention to three areas: investment bankers (where they add the most value vs. not); the benefits of established “added” metrics to track the business; and explaining and justifying competitive differentiation in a manner that investors will believe (or not).

So far in this Nexus series, we covered the initial 10 tips to prepare for the process itself (see Part 1 , Part 2, Part 3 and Part 4).

Jason Busch is the Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

Zycus update: Basics, BOTs and Beyond (Part 2: AI, MERLIN Roadmap and Summary) [PRO]

Artificial intelligence capabilities are central to Zycus’ product roadmap. This Spend Matters PRO brief provides an overview of MERLIN (Zycus’ AI underpinnings and platform) and how it ties to Zycus’ overall product strategy and release schedule. MERLIN's main concept is based on autonomous procurement (the tailored bots that it builds are called BOTs), with a focus on automating all the routine, repetitive tasks of purchasing processes, especially transactional and manual ones. For an overview of the company and a product update, read Part 1.

Zycus update: Basics, BOTs and Beyond (Part 1: Company and Product Update) [PRO]

digital

A Spend Matters team attended the Zycus summit this summer in Utah that provided a deep dive into the firm’s latest developments and gave us a chance to talk to some customers. This two-part Spend Matters PRO briefing will highlight the results of that day, focusing on updates to Zycus’ business, product development and, most specifically, its innovation related to autonomous computing — particularly with its unique approach to bots that combines RPA, AI and a democratized platform approach. It could be a game-changer in the industry, but it’s also not very easy to execute. We’ll weigh in on both sides of this coin.

Part 2 will provide an overview of MERLIN (Zycus’ AI underpinnings and platform) and how it ties to Zycus’ overall product strategy and release schedule. MERLIN’s main concept is based on autonomous procurement (the tailored bots that it builds are called BOTs), with a focus on automating all the routine, repetitive tasks of purchasing processes, especially transactional and manual ones.