Author Archives: Nick Heinzmann



GoProcure: Vendor Introduction (Part 2 — Product Strengths and Weaknesses, SWOT and Selection Checklist)

In our last Spend Matters PRO brief, we introduced you to GoProcure, a four-year-old provider based out of Duluth, Georgia, that is deploying a B2B marketplace and platform for tail-spend management. Bringing together basic RFQ and requisitioning tools, a marketplace for procuring goods and services, and complementary services like a buying desk, GoProcure is positioning itself as capable of covering the full range of tail spend in a market where most vendors address some but not all of the tail. And while its coverage is not necessarily exhaustive, GoProcure’s current iteration does encompass a lot of capabilities — albeit in a bit of a fragmented manner. Whether it’s a fit for a procurement organization’s unique challenges and needs, however, will come down to how exactly one conceives and chooses to tackle the tail.

Part 1 of this brief provided some background on GoProcure and an overview of its offering. In Part 2, we 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 GoProcure might be a good fit. We also give some final conclusions and takeaways.

GoProcure: Vendor Introduction (Part 1 — Background and Solution Overview)

The question of how procurement organizations can best address the long tail of spend is still an open one, with multiple vendors offering their own flavor of the optimal tail-spend “solution.” For some, tackling the 80% of spend that is opaque and unmanaged is a matter of applying RFQ tools and automation to quickly bring dark purchasing into the light. (Recently profiled Fairmarkit is one example of this.) For others, a patchwork approach is the right fit, extending currently used P2P suites into the long-tail territory via punchout and integration methods. (Coupa’s combination strategy of using Aquiire’s web agent technology to crawl the internet as if it were a virtual catalog while also offering direct integration of Amazon Business content into e-procurement search results is one prominent example.)

Yet alongside these technology-first models another option is emerging. Some vendors are combining the possibilities of RFQ and catalog management tools with a BPO-lite, providing a combination of technology and services somewhat analogous to a managed services provider (MSP) for tail spend. (Chicago and Dubai-based Simfoni, which we cover in our SolutionMap for Spend and Procurement Analytics, is a notable example with a range of tail spend-specific tools.) The intended result is to capture the full range of tail purchases by creating routes for everyday users to easily request or source needed lower-value goods and services from suppliers that are not strategically managed while capturing the exceptions through the optional service layer. For more insights on how these tail-spend management approaches are all competing (and converging), see our tail spend management research study report here.

This multi-pronged approach is the strategy behind GoProcure, a four-year-old vendor out of Duluth, Georgia. GoProcure bills itself as a B2B e-commerce platform for all-in-one tail-spend management. Combining basic RFQ and requisitioning tools with a marketplace for procuring both goods and services, along with complementary services like a buying desk, GoProcure is positioning itself as capable of covering the full range of tail spend in a market where most vendors address some but not all of the tail, allowing it to claim procurement organizations at Global 2000, mid-market and private equity portfolio companies as clients.

This Spend Matters PRO Vendor Introduction offers a candid take on GoProcure and its capabilities. The two-part series includes an overview of GoProcure’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Prodigo Solutions Vendor Introduction: Analysis, SWOT, Checklist (Part 2 — Product Strengths and Weaknesses)

locum tenens

In our last Spend Matters PRO brief, we introduced you to Prodigo, an 11-year-old provider based near Pittsburgh that is deploying a platform that’s specific to healthcare procurement and contract management. With 20% of the U.S.’s largest integrated delivery networks (IDNs) and more than 30% of Gartner’s top hospital supply chain departments as customers, Prodigo has numerous use cases and a large pile of healthcare-related data on which it has built a strong core product. And although it is not always best-in-class when compared against leading P2P providers that lack a vertical focus, Prodigo’s willingness to target the needs of a specific market have led to some commendable product strengths as well.

Part 1 of this brief provided background on the company and an overview of Prodigo’s offering. In Part 2, we 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 Prodigo might be a good fit, and some final conclusions and takeaways.

Prodigo Solutions: Vendor Introduction (Part 1 — Background and Solution Overview)

healthcare

Rogue spend is a common problem for procurement in all industries, but in healthcare the issue is on a whole other level. Whereas the typical organization can see about 30% of indirect spend that falls into the off-contract category, that number can climb to as much as 60%.

There are multiple factors that drive these rogue purchases. Notably, in healthcare the distinction between direct and indirect spend is less of an issue than the difference between clinical spend (that is directly related to patient care) and non-clinical spend. These categories are managed a little differently from how procurement organizations typically approach direct and indirect purchases. Internal demand for clinical items can vary significantly, and since not having an item in inventory could be a matter of life and death, the need to spot buy specific medical devices or materials isn’t analogous to an ad hoc spot buy that you might find for many indirect spend categories.

Healthcare spend is also nuanced because the requestors — the medical personnel — often have a stronger say in what is purchased and to what degree cost is a factor than procurement gets compared with other verticals. This includes “physician preference items” where a physician MUST have a certain medical device/instrument that is different than the hospital system standard (and hopefully not because the MD is getting wined and dined by the manufacturer or distributor!).

This industry dynamic applies to the healthcare supply markets, as well, where unique features and quirks, including a much higher use of group purchasing organizations (GPOs) and strong influences by medical device manufacturers over how their products are priced and used within hospitals, only further complicate procurement efforts to bring spending under control. Over 90% of GPO revenue is from supplier-funded “administrative fees” (i.e., rebates that are exempted from federal government kickback regulations), and until this commercial model goes away, hospitals still need to automate them (including percentages of those fees shared back with the hospital) and other supply chain requirements such as distributor owned/managed inventory within the system.

These healthcare-specific challenges are well-known to Prodigo Solutions, a purchasing technology solutions company based in the suburbs of Pittsburgh, Pennsylvania. Originally grown out of the UPMC’s needs for better managing its own internal purchases, Prodigo today operates as a standalone software provider, offering tools that support e-procurement with healthcare-specific controls and post-signature contract management and compliance. Its customers include both integrated delivery networks (IDNs) and small community hospitals alike, and its healthcare marketplace currently facilitates transaction volumes in excess of $15 billion.

This two-part Spend Matters PRO Vendor Introduction series offers a candid take on Prodigo and its capabilities. It will include an overview of Prodigo’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis, and a selection requirements checklist for companies that might consider the provider.

ConnXus Brings ‘Quick and Clean’ Supplier Data Cleansing to the Masses with SmartScrub: Vendor Snapshot Update

For the majority of procurement organizations today, obtaining and maintaining accurate supplier master data is a huge pain point. Most organizations still do not trust their vendor master as a single source of truth (or even have one!) — nor do they have the time or personnel to continuously validate and enrich supplier records to the degree that is necessary to create that level of trust.

One solution to this problem for the last decade or so has been to gather a list of suppliers the organization has worked with in the past year and submit the records to one of several firms that clean and enrich this data as a service for various purposes (e.g., deduplication, verification, enrichment, etc.). Among these firms is ConnXus, a best-of-breed solution provider within the Supplier Relationship Management & Risk SolutionMap category. ConnXus is best known for strong supplier diversity management and a growing set of adjacent capabilities (such as a next-generation supplier network where a supplier can register once and share its profile with any business).

As technology has improved in the market, new options for supplier master data cleansing and enrichment have turned this service into an increasingly automated process (e.g., doing so via API every time a new supplier is added). But offerings vary. Some require a license to the entire platform to use the data services, while others provide a cost-effective entry point that do not guarantee perfect results. So ConnXus, as of this week, is seeking to provide a middle ground between these two extremes: A competitively priced supplier data cleansing and enrichment subscription called SmartScrub that guarantees 98% accurate records for U.S.-based businesses returned in under 24 hours — often much faster, as the service is completely automated once users provide an uploaded template containing supplier name and valid address.

More important for procurement organizations, SmartScrub’s capabilities are available for purchase without engaging ConnXus’ supplier management solutions. And at the price points ConnXus is offering, most companies will have the ability to validate, centralize and report on diversity and industry data for thousands of records where before such solutions may have been inaccessible. Although ConnXus does aim to turn these subscribers into full customers, of course, especially as it quickly evolves its data validation capabilities into what it sees as the next logical evolution: mass supplier discovery of diverse and industry-specific vendors.

This Spend Matter Vendor Snapshot Update reviews ConnXus’ new SmartScrub subscription and explains how the supplier management vendor is taking a potentially disruptive approach to enabling MDM cleansing and virtualization. It is an addendum to our previous reviews and analyses of ConnXus:

Part 1: Background and Solution Overview
Part 2: Product Strengths and Weaknesses
Part 3: Commentary and Summary Analysis
ConnXus Envisions a Next-Generation Supplier Network With myConnXion: Vendor Snapshot Update

What Puts the ‘U’ in Coupa? Look to the FAANG Playbook on Usability

Rare is the presentation where a Coupa employee fails to reference the acronymic meaning of the company’s name. We heard this numerous times at Coupa Inspire 2019 this week in Las Vegas, and while few these days would confuse the Palo Alto cafe with the unicorn software provider, I have to admit the repeated messaging on the name has clearly sunk in with customers.

Case in point, over multiple conversations at Inspire, customers have frequently referred to the “U” — usability — as a key reason why they either signed with Coupa or have remained a client.

Mastercard Track: A Gateway to a New Kind of B2B Ecosystem (Part 2) — SWOT Analysis and Market Implications

Over a decade ago, American Express led the payments way in making innovative investments aimed at procurement organizations and their suppliers, primarily through its venture and partnership arms. (Remember MarketMile/Ketera, anyone?) But more recently, it appears that Mastercard has picked up the B2B innovation mantle, opting to organically build a solution aimed at buyers and suppliers with procurement front and center in the business case crosshairs. This new solution, Track, surprised us in multiple ways (click here for an introduction to Track), especially for its audacious supplier network vision (and we might add also for what it is not doing, at least not yet).

Is the tail of Mastercard’s new supplier network offering — comprised of a trade directory, supply risk monitoring capability and payment ledger — wagging the payments dog? The answer might surprise you. This purebred procurement solution can hunt without even hinting at the need to enable a virtual or corporate card swipe.

Indeed, with its new Track solution, Mastercard appears quite serious about the procurement and supplier management market beyond just finding creative ways of leveraging its rails to enable payments. With this new product release, Mastercard stands in contrast to American Express, among others, which still appears to be taking the same old B2B payments and financing pooch out for a walk, albeit with an updated veneer for the digital working capital era.

But before we drown in our doggy metaphors, let’s analyze what’s good — and what’s not so good — about Mastercard’s first generation Track release and what it means for procurement organizations, supporting services providers (e.g., consultancies) and the procurement technology sector as a whole.

Mastercard Track: A Gateway to a New Kind of B2B Ecosystem (Part 1) — Vendor Introduction and Solution Overview

B2B payments represent a significant opportunity for payments providers. Within the U.S. alone, Deloitte research suggests that B2B payments are expected to reach $23.1 trillion by 2020, following a 5.8% CAGR since 2014, with large enterprises accounting for more than 60% of all transaction volume. Financial institutions, however, have placed comparatively less emphasis on the B2B space in favor of B2C transactions, which in spite of their smaller relative total size present less complexity in terms of technological and process problems to solve. Yet this is beginning to change. Banks, payment providers and other institutions are doubling down on the opportunities in B2B, and some are even starting to get their foot in the door by offering software targeted toward procurement organizations. For example, Mastercard has been rolling out its new Track solution in partnership with major banks and P2P and S2P suite providers and via public demonstrations at vendor conferences like Basware Connect and Ivalua NOW. Following the integration of Track’s payment capabilities with Singapore’s Networked Trade Platform (NTP) last year, Mastercard is getting its procurement technology start in, of all things, supplier master data and risk management. This may seem like an odd fit, especially when there are other technology providers offering similar — or in some cases, far more sophisticated — tools for managing supplier data and tracking third-party risk. As many B2B “old timers” know, banks and payment networks (Mastercard included) have been trying to insert themselves into P2P processes for nearly 20 years, and the results have been a failure every time, because they were always about funneling the transactions to their payment networks in order to charge suppliers 2% to 3% processing fees. This relegated these initial efforts to tail spend and highlighted how they couldn’t add value to the broader S2P process.

But we think this solution from Mastercard actually has huge potential and will likely be a market disruptor. Why? Well, from a practitioner standpoint, what would you think of a vendor who took all your supplier master data and then ran it through its “magic engine” and then showed you all the duplicates and supplier risk warning flags — and they did this on a freemium basis? That should catch your attention. And it should catch the competitive attention of D&B, LexisNexis, supplier networks, supplier risk/intelligence providers, supplier discovery tools and others that play in this space, as well as the partnering attention of S2P application providers that want an instant supplier network partner that can do more than process low-dollar transactions on a payment network.

Mastercard is just starting the first act of a longer, platform-based play, and the question today is simple: Is this “priceless” MDM and supplier risk solution worth a look? The answer is a resounding “Yes!” Because unlike other services in the space, Track takes the long view, supporting Mastercard’s aspiration to enable and connect into a global B2B ecosystem of multiple services, from business identity and risk management to payment facilitation and trade finance. And while we expect many of Track’s initial capabilities and partner offerings to evolve over time — what Mastercard has been publicly demonstrating over the past several months is more of a minimum viable product than a fully matured and battle-tested solution — the first cut is worthy of a deeper dive.

This Spend Matters PRO Vendor Introduction offers a candid take on Mastercard Track and its initial capabilities. Part 1 includes an introduction of Mastercard’s offering and a breakdown what the solution can (and can’t) currently do. Part 2 will provide a SWOT analysis and our key recommendations to interested parties (procurement organizations, technology providers, supporting services providers) evaluating Track as encountered through partner P2P or S2P providers.

Accrualify: Vendor Introduction (Part 3) — SWOT, Competitive Placement and Customer Recommendations

Accrualify is a new breed of finance-oriented solution that targets a range of procurement and payables processes. It is one of a handful of vendors that, especially within the middle market, can offer solutions that solve the needs of finance and procurement organizations directly. While Accrualify’s AP automation and procurement capabilities are not as robust as some, the overall package and approach could present a more attractive use case for nimble solution buyers with specific requirements in mind.

In Part 3 of Spend Matters’ PRO series examining Accrualify, we turn our attention to placing the provider in a competitive context of a new breed of solutions targeting finance and procurement, offer a strengths/weaknesses/opportunities/threats (SWOT) framework and conclude with recommendations for potential customers. (See Part 1 for an introduction to the provider as well as Part 2 for its solution strengths and weaknesses.)

NPI: Provider Introduction, Summary and SWOT

In a world where everything is rapidly digitizing and moving to a services-based delivery model, there is perhaps no category more difficult for businesses to manage than IT services. The more operations move to the cloud and businesses rely on major IT services providers like Microsoft, SAP and Oracle to get work done, those in charge of IT sourcing, whether that be procurement, IT or a dedicated team in a center of excellence, are encountering a higher volume of IT services purchases, more complex offerings and pricing structures to negotiate, and more risk inherent in making the wrong choice. And with worldwide IT spend projected to reach $3.8 trillion by the end of 2019, all of these issues are only expected to build on themselves.

Helping manage this situation is exactly what NPI, a consulting firm based in Atlanta, does for IT sourcing organizations. Founded in 2003, NPI helps businesses identify and eliminate overspending on IT purchases, as well as provides vendor-specific intelligence on a range of topics, including risk reduction efforts, licensing program optimization and negotiation playbooks. Its services span subscription pricing intelligence to renewal process advisory and IT sourcing transformation consulting, and the firm counts businesses as varied as Morgan Stanley, the Social Security Administration, Denver Health and Norfolk Southern as clients.

This Spend Matters PRO Provider Introduction offers an overview of NPI, including quick facts on the provider. The brief also has an introduction to each of NPI’s six business lines, an overall SWOT analysis comparing it to other procurement consultancies and a selection checklist for companies that may consider the provider.

Accrualify: Vendor Introduction (Part 2) — Product Strengths and Weaknesses

In our initial research brief on Accrualify, we introduced the four-year-old provider based out of San Mateo, California. The upstart procurement and finance technology vendor offers a unique set of technology capabilities to manage specific components of the invoice-to-pay cycle, as well as adjacent areas like basic requisitioning and broader accruals management.

The first part of this brief provided an overview of Accrualify’s offering and a short selection requirements checklist that outlined the typical company for which Accrualify might be a good fit. In today’s installment (Part 2), we provide a breakdown of what is comparatively good (and not so good) about the solution, exploring Accrualify’s “positives” and “negatives.”

3 Reasons to Love ‘Nimble’ Procurement Technology Providers

Spend Matters’ analysts have been writing personal essays on their favorite SolutionMap personas: Nimble, Deep, Turn-Key, Configurator and CIO Friendly, as well as Optimizer for sourcing providers and Global for CWS vendors. The personas help companies select which solution provider is right for them. This week’s essay is by Nick Heinzmann, an associate analyst and a former editor of Spend Matters.

Let’s be blunt: If you’re going to pay five or six figures for a software license, you’d better hope your employees actually use it. But can your technology provider guarantee that everyone who uses the system — from admins to power users to the everyday requisitioner or collaborator — will adopt it? What about enjoy it, willingly log in and encourage everyone to collaborate on the platform?

For many companies, this is easier said than done. Implementations that seem well planned on paper can quickly become nightmares. Systems with deep, powerful functionality but archaic user interfaces can scare less ambitious users back to the warm embrace of Excel.

Issues like the above and others are why I love the Nimble persona — that best at understanding the “millennial” mindset when it comes to technology. Why can’t procurement software be as fun and easy to use as apps like Instagram, Venmo and Slack?