Author Archives: Jason Busch



About Jason Busch

Jason is the founder of Azul Partners, which he started in 2004. He is regarded as one of the leading experts in the scintillating world of procurement, finance and supply chain technologies. Jason currently serves as Managing Director of Spend Matters Nexus, which provides market intelligence, strategy support and due diligence advisory for private equity firms, CEOs and corporate development teams. Prior to Azul Partners, Jason got his on-the-job education in procurement solutions working at FreeMarkets in corporate development, strategic sourcing, marketing and other areas. Before that, he started his career in consulting and merchant banking. Jason holds undergraduate and graduate degrees from the University of Pennsylvania in English Literature and History.


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

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).

Brightfield (TDX) Raises a Whopper of a Round: Analysis + Implications for Contingent Workforce/Services Technology

Earlier today, Spend Matters reported that a $53 million Series A funding round was raised by Brightfield (TDX), formerly a consulting firm that became a provider of AI-derived market intelligence for the contingent workforce/services community. Spend Matters believes the size of the round — very large for a series A — is indicative of a number of factors beyond the fact that Brightfield (TDX) is a more mature organization in terms of product, customers and revenue than most companies going up for an earlier stage funding round.

Indeed, Brightfield “2.0’s” rapid data-driven success after its pivot — and the comparatively gargantuan investor vote of confidence at the Series A level — represent several converging trends. We will explore these in this Spend Matters Nexus research brief, which also provides overall analysis and key takeaways for services procurement providers, investors and practitioners. Our analysis begins with a company and solution overview of Brightfield and its TDX platform, Talent Data Exchange.

Jason Busch serves as 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).

DPW — The Best New Procurement Event in Years

Bid Ops

A couple of weeks ago, I attended and spoke at Digital Procurement World (DPW) in Amsterdam. The event was the brainchild of one of the first employees at Procurement Leaders, Matthias Gutzmann. With DPW, his idea was to bring together not only procurement organizations and technology (and services) firms in a conversation around digital, but also to engage the start-up community — and investors.

On just about every count, DPW was a runaway success. It was the very first procurement event I’ve been to that did a great job of engaging early stage technology companies and connecting them with buyers, consultants and others.

Here are a few of my observations:

Tipalti and the Accounts Payable Automation Market: Now Officially Hot, Hot, Hot!

procurement

Earlier this week, you may have seen that Tipalti raised $76 million in a Series D funding round. For those who do not know Tipalti, it is one of a variety of accounts payable automation (and payment providers) in the B2B market.

With a primary emphasis on middle market companies, Tipalti’s AP automation competitors include both broader procure-to-pay vendors that also come down market (e.g., Basware, Corcentric, Coupa, SAP Ariba, Tradeshift, etc.) and a diverse set of accounts payable automation specialists, including Accrualify, AvidXChange, Beanworks, SAP Concur, Symbeo, MineralTree, MediusFlow, Yooz and dozens of others.

It’s our view that Tipalti’s funding round is proof positive that the AP automation market is truly hot.

20 Questions On Supplier Network Selection (Part 1)

Editor's note: This Spend Matters Plus brief is a refresh of our 2013 series on supplier network selection, which originally ran on Spend Matters PRO. 

The supplier network and business connectivity landscape has evolved into a world where simply staying on top of all of the on-ramps to systems and commerce is challenging enough — let alone selecting and implementing actual networks and having them to talk to buy-side systems and each other. We’ve come up with roughly 20 questions that customers should consider as early as possible when developing a business case and selection approach to the different tools that are available.

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 4: You Can’t Hide the Customer Voice)

The Spend Matters analyst team has collectively been involved in dozens of transactions in the procurement solutions market in recent years. From our vantage point, especially in the due diligence area, we have seen firsthand how most sellers only partially prepare to maximize their upside to come out of a transaction/investment.

This Spend Matters Nexus brief provides insight into how a company in the procurement solutions sector (and others) is likely to be evaluated so that it can best prepare for a process. In our view, transactions do not have to be a zero sum game, as optimal synergies are best when planned, measured and then executed against.

So far in this Nexus series, we covered the initial nine tips to prepare — ideally far in advance — for the process itself (see Part 1 , Part 2 and Part 3). Today’s installment focuses on the voice of the customer — and almost singularly how important this factor is overall. Tip number 10: Knowing what your customers think (and how smart buyers, especially private equity, will discern the true state of customer satisfaction and metrics even without the support of the selling firm).

Many management teams are not aware of the lengths that acquirers and their advisers will go to in conducting advanced customer due diligence. This includes reviewing all available third-party information in the public (or “partial” public domain), such as talking to analysts, consultants/channel partners and, of course, reference customers themselves — whether sanctioned or not by the selling party. Their techniques might surprise you, as the voice of the customer is an indispensable due diligence component in mitigating risk, as well as helping quantify synergies and upside for a given deal.

Jason Busch serves as 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).

GEP: Vendor Snapshot (Part 7) — Competitive Landscape

This final installment of our seven-part Spend Matters PRO series on GEP will look at how it compares to its competitors, like SAP Ariba, Coupa, Ivalua, Jaggaer, Corcentric’s Determine, SynerTrade, Wax Digital and Zycus.

Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5). A SWOT analysis and commentary followed in Part 6.

GEP competes in several market segments and brings varying degrees of capability, differentiation and strength in many areas. In certain segments of the market, it is more successful in positioning an overall suite value proposition rather than individual modules (individually or together) for several reasons. Clearly, GEP “keeps coming back to suite” as its technology mantra for good reason.

For example, Spend Matters’ analysis suggests GEP is stronger within the strategic sourcing services and solution areas than in the P2P components of its suite from an “absolute” functional capability perspective. Yet the provider is effective at selling both areas together when they are equally valued. GEP has indeed won some large-scale P2P customers, replacing other solutions, based on the integrated suite value proposition.

Or consider how GEP’s e-invoicing and e-payment capabilities are part of its integrated source-to-pay (S2P) suite solution but are not yet on par with specialist solutions. As another example, GEP has a strong analytics offering but typically positions it within the context of its suite, so while it could compete against specialists in this area, given its classification capabilities, it typically does not.

In this PRO analysis, we’ll set up our coverage primarily relative to technology application segments such as:
* Fully Integrated (and some “loosely coupled”) Source-to-Pay Suites
* Full P2P Suites
* End-to-End and best-of-breed strategic procurement technology (SPT) offerings
* e-invoicing and e-payment specialists
* Supplier and master data management (MDM) providers

But, we’ll also touch on major consultancies, BPO players and niche MSPs.

GEP: Vendor Snapshot (Part 6) — SWOT and Commentary

Global Risk Management Solutions (GRMS)

For those procurement organizations that have not looked at GEP’s technology suite in recent years, they will likely be surprised when exploring its breadth of functionality, as well as the nuances associated with capabilities that differentiate it from other suites. These areas include clever takes on category management, integrated suite analytics, mobile support, and a platform-as-a-service (PaaS) and cloud-native solution built and hosted on the Microsoft Azure platform.

This sixth installment of the seven-part Spend Matters Vendor Snapshot covering GEP provides an objective SWOT analysis of the company and offers our commentary on its platform. In our next installment, we will close out with a competitive market analysis, with recommended shortlist candidates as alternative vendors to GEP, and some recommendations and provider selection guidance for companies that may consider GEP’s suite or even individual modules and capabilities. Previous installments provided an in-depth look at GEP as a company (Part 1), its specific solutions (Part 2 and Part 3), and a detailed analysis of solution strengths (Part 4) and weaknesses (Part 5).

20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 3: Before the Process — Third-Party Validated Analysis and the Importance of Understanding the Strategic Buyer Landscape)

Aside from companies already owned by private equity firms, it is the rare solution provider — or any company — that is selling to private equity, going out for a later investment round or seeking a strategic buyer that has prepared adequately for the transaction process in such a way that the efforts will fully maximize the valuation, terms and other factors in its favor. That is, unless it gets lucky, and to be fair, some folks get lucky!

As expert advisers — primarily to “buyers” — we’ve seen this phenomenon play out time-and-time again in the procurement solutions universe. But it doesn’t have to continue to be that way. This series is focused on leveling the playing field for more advanced sellers of all types, gained by sharing our lessons learned from over 20 years of involvement in transactions in the sector, and especially our work as advisers to private equity investors, nearly all of which are extremely methodical and rigorous in their deal screening and due diligence processes.

So far in this Spend Matters Nexus series, we covered the initial seven tips to prepare — ideally far in advance — of the process itself (see Part 1 and Part 2). Today we continue with the next two tips to pay particular attention to in the lead-up to a process (but still ideally before it begins). And later in the series, we will explore tips to leverage in the actual process itself, ideally once you’ve fully prepared ahead of time to maximize your chances of an optimal exit, transaction or investment.

Jason Busch serves as 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).

GEP: Vendor Snapshot (Part 5) — Solution Weaknesses

In Spend Matters’ previous installment of our seven-part GEP review, we called out some of the real strengths of the SMART by GEP platform, including some that are rare in the market today. In this Part 5, we are going to balance our analysis by also pointing out some of the "weaknesses" of the platform, at least against peers. (A weakness isn't a weakness unless you are looking for, or need, a certain capability, which, of course, you may already have in-house in another platform.)

While we may have hinted at these by way of omission of coverage in our solution overview in Part 3 and Part 4, we are going to get more specific so you understand precisely what isn't there (and can make a judgment call as to whether you even need the capability). We’ll look at deep optimization (especially logistics), asset management for direct, VMS, trade financing, T&E and more.

GEP: Vendor Snapshot (Part 4) — Solution Strengths

procurement software

In Part 2 and Part 3 of Spend Matters’ seven-part review of GEP, we provided a relatively complete overview of GEP's SMART S2P solution that it takes to market and uses to power the S2P efforts of some of the largest companies in the world. And while we may have hinted at some of the stronger parts of the offering, in today's installment we are going to call out the real strengths of the platform, some of which are (relatively) unique in the market. Those strengths include analytics/master data management, strategic sourcing with expert insight, mobility, network intelligence, opportunity management and more. Let’s take a look at each.

Coupa financial results: Delving into another strong quarter

procurement

Earlier this week, Coupa reported its Q2 results for fiscal 2020, achieving revenue of over $95 million (a near 55% increase year-over-year, primarily from organic growth). The quarterly revenue performance beat analysts’ estimates, and non-GAAP EPS was also above expectations, although cash flow from operating activities declined quarter-over-quarter. Regardless, investors cheered the results, helping Coupa hit a price/sales ratio of nearly 28X in early morning trading on Thursday — and a roughly $9 billion market cap (representing over 125% appreciation in the stock price in 2019 alone).

That’s valuation perfection by just about any measure when compared to peers.

But what is happening within Coupa (and the broader market) under the surface that is driving these numbers? This Spend Matters Nexus brief provides insight on broader (and related) market trends while peeling back a few layers of the onion on what’s driving Coupa’s success, including how it is benefiting from various competitive dynamics in the market (e.g., SAP Ariba’s broader integration hurdles), as well as some of the challenges Coupa must confront to fully capitalize on its acquisitions.

Jason Busch serves as 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).