Observations on the Spend Matters 50 to Know and 50 to Watch Lists

Last week, we published the Spend Matters “50 to Know” and “50 to Watch” lists. We’re sure you have pored over them with great interest, but here are some general observations that struck us when we stood back a bit from the hard work of sorting out who should actually make it onto the lists.

European representation is reasonable in the “to Know” list with Scanmarket, Tungsten, Proactis, Basware, BravoSolution, Pool4Tool, Achilles, Ivalua, Proxima … and SAP of course!  It does not look quite so strong in the “to Watch” list although Wax Digital, Per Angusta, Spend360, Sievo and others are flying the European flag. Now maybe that is partly a language thing – if a start-up in France, Italy, or Germany is working and selling initially at least in local language, it may well be that we have just not come across the firm as yet. As they grow, there’s every chance they will come onto our radar, but we would be delighted to hear about more genuinely innovative firms in our space, whichever country they are from.

Consolidation is a key theme – once upon a time SAP, Ariba, Fieldglass and Concur would have had separate entries. Not any longer. Even amongst the smaller firms, SciQuest, Determine and Proactis have both been pursuing acquisition “roll-up strategies”, (some more successfully than others from a shareholder value perspective), taking out some players who once would probably have featured here. We see more of this to come, although of course the pipeline keeps being filled with our innovative “to Watch” type firms growing and coming though as competitors to the established giants.

Outsourcing has not developed in the way many thought it might. We hear mixed reports around the giants in the market, but there certainly don’t seem to be too many of the old mega-deals that fed IBM and Accenture / Procurian going back a few years. Xchanging looks finished as a procurement outsourcing business, and whilst Proxima is still doing well, the firm has moved to a broader market positioning, with managed services and consulting in the frame too.

Efficio comes onto our list, but they have been careful not to be boxed in by definitions. That firm also demonstrates another important trend – for software to become an important part of the proposition for firms who once would have been much more firmly in the “consulting” space. Whether it is consultants / managed services providers like Efficio building their own software, or other advisory firms partnering or using ‘white label’ software from other providers, or indeed software firms offering more in the way of services, the once fairly sturdy boundaries between procurement software and consulting have been breached and often demolished altogether. We don’t see them being rebuilt any time soon.

Boom areas in the last 12 months have included supply chain finance and related offerings, and the whole “work intermediation platform” space. Our US colleague Andrew Karpie is THE global expert in that area, and he has a list of at least 50 firms, most no more than a year or two old, that have sprung up around linking buyers and individual providers of such services. We have only included a handful, but whilst some of the firms are pretty esoteric, this is changing the way organisations engage “suppliers” – and even way they are thinking about talent and internal staff management. So CPOs need to understand what is going on here.

Another “boom” that hardly seems worth mentioning, being so obvious and visible, is the cloud-based, "software as a service" approach.  Pretty much every software provider on our “to Watch” list is cloud and subscription based, many with a very low cost or even free entry level offering.

Do take a look at the lists anyway, and if you want to start a discussion in the “comments” section about any other trends, disagree with our choices, suggest folk who should have made it, then we’re always happy to get into some constructive debate with our esteemed and informed readers!

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