After sticking through five parts of this series (Part I, Part II,Part III,Part IV, and Part V) you accept that you need to start with e-Procurement, which means getting an e-Procurement foundation in place as soon as possible if you don’t have it or upgrading the e-Procurement foundation if the solution you have now does not meet your baseline requirements. But how do you select the right solution?
After careful consideration, it became quite obvious that e-Procurement was the definitive starting point. It also became quite obvious that no matter how good an argument a vendor gave you for starting elsewhere, it was never the right starting point because all these solutions require data — that the e-Procurement solution collects — and assuming that you could get the full value of their module without that data was a false assumption. (However, if the argument is strong enough, it’s the next module you work on, as soon as possible.) Unfortunately, now that you are ready to select a solution, the answer of what to do next is not so obvious.
Even though we outlined a minimal baseline that is more-or-less an absolute for every organization — small, medium, and large alike — it doesn’t get us anywhere towards selecting a vendor solution, or even identify potential starting vendors, as all the minimal baseline does is allow us to eliminate any solution that doesn’t have core functionality, and, despite vendor claims to the contrary, isn’t yet an enterprise ready e-Procurement solution. So how do you select between what’s left? Especially when this still leaves potentially dozens of solutions that can easily meet your (current) baseline needs.
Well, the answer is a good old-fashioned RFP, but who do you send the RFP too? You don’t want to send it to 20 vendors that seemingly make the baseline based upon their marketing materials and whatever third party write-ups you can find. You want to narrow in to a top 3-5 with the technology to serve your needs as soon as possible, and send the detailed RFPs to them.
If you’re a large company, Spend Matters*1 Solution Map could be a good starting point as that verifies the solutions have certain technical capabilities and you can weight down to the capability level in a detailed assessment project (assuming, of course, you’ve already done a gap analysis and a study to determine the technical foundations that are necessary and relevant to your organization — the must haves and should haves). (And while the Spend Matters Solution Map doesn’t capture every vendor, it captures a majority of those that can serve large multi-nationals.)
If you’re a larger mid-size company, Spend Matters TechMatch may be a good starting point as it is based on Solution Map and allows you to rank vendors by answering questions that encapsulate (related) functional requirements, and you can always verify deep technical requirements where it’s relevant in the RFP. (And while Spend Matters TechMatch doesn’t capture every vendor that can serve a mid-size, primarily regional, organization, it captures more than enough.)
If you’re a smaller company, TechMatch could work, but the reality is that you likely don’t have the budget for it, and/or want to focus in on the smaller, lower-cost, and/or newer solutions to start, of which only a minority are covered at any point in time (due to the baseline capability required for a vendor’s solution to make the maps and the fact that smaller vendors sometimes don’t have anyone to do analyst relations and/or marketing full time). Also, it’s likely that you can’t yet afford half the solutions in the map anyway. (The suites*2 are quite expensive. While the suites are most definitely worth it to a large multinational when you do the ROI calculation, the up front [and even ongoing cost] is sometimes impossible for a smaller organization to justify.)
Moreover, an implicit assumption in SolutionMap is that you’re a typical company in a vertical buying primarily indirect and direct categories that are well covered by the solutions represented in the maps. If this is not the case, or if you need more solutions at the lower end of the market, given that the maps typically only represent around 20 solutions, with the majority of these solutions best suited for the mid-size or large enterprise, the maps may not be for you. (Especially when there are more than twice the number of solutions on the market then are represented on any map.) Moreover, if your company is not a typical company and needs a solution customized for a specific vertical (like Marketing or Legal, etc., where a specific solution would not show well on a general map), the maps won’t work for you in these edge cases.
So where do you look? The big analyst firms? Their reports costs thousands of dollars and tend to cover less vendors. Conference exhibitors? That’s typically limited to the bigger companies with larger marketing budgets given the cost of a booth these days and, thus, no better as a starting point. ProcureTech, that puts out a ranking of 100 companies a year? There’s some really good lower end companies there (and the doctor is impressed with the breadth of companies they have identified), but the ProcuremTech 100 is very broad and their organization of this report, and their companies, ranges from ok to confusing to utterly meaningless for a buyer looking for a specific type of solution! (Growth? Innovation? Customer Satisfaction? How do those categories help a company identify who to look at when they need a specific solution type. And sometimes the solutions within a same general category are so different they are barely comparable. This happens a lot in SXM and CLM, as we will discuss in future series.) You could engage with ProcureTech, as they have a good database now, but the doctor feels you shouldn’t have to do an engagement with anyone just to find a starting list of vendors you might want to look at (that the analyst firm could advise you on) or a basic understanding of how the analyst firm can help you before you engage them — especially if all you want is a set of logos in a specific application area when DPW gives you 100+ of those for free with their latest “Sustainable Procurement Technology Landscape“!
How about Spend Matters Almanac? It’s better than most directories out there as it does include over 575 listings across 61 categories, but that’s still only half the vendors in the global extended procurement technology space. (Presumably because most vendors, like most buyers, probably don’t realize it exists and some of those vendors that are aware of it, but not listed, also assume that most buyers aren’t aware of it and thus don’t want to pay for the attention grabbing premium listings and don’t bother with the Almanac at all — often not realizing there is a free listing option.)
The reality is that there’s no good starting point for even getting a near-complete list of relevant vendors to consider, and then when you have that list, putting together a meaningful RFP — which has to get beyond just basic technology and address the core problems your organization needs to solve. (And the answer here is to NEVER take a vendor RFP template and start from it, because all that has ever been since Procuri came up with the concept 15+ years ago is a feature-function list heavily favoured towards the vendor giving the RFP template away for free — and it’s not how many standalone features the product has, including many you don’t need or won’t use, it’s the business functions that support your business, the technical foundations the platform has to be built on to support those functions, the integration capability with other products and platforms you need to work with and support, the support capability of the vendor for implementation, integration, training, and on-going support, etc.)
In other words, it’s difficult to find the right vendor as it’s difficult to even find a meaningful shortlist to send the RFP to. This shouldn’t be the case, but it sadly is. Not a week goes by when the doctor doesn’t talk to a vendor who tells me that a potential client shortlisted them with a second vendor that no one who knows the space would compare to that first vendor and not a month goes by where the doctor doesn’t get an unsolicited request to identify vendors like “X, Y, and Z” where X, Y, and Z are in completely different S2P categories (but the potential buyer thinks they are all interchangeable).
The situation needs to improve, but the reality is that some vendors are profiting too much off of the status quo, the big analyst firms who depend on big cheques from these big firms don’t have a reason to change the status quo, and the smaller analyst firms don’t have the money or the person power to cover all the vendors they want to.
Hopefully now that a few smaller analyst firms are growing they will start to tackle this core problem, but in the interim, the doctor, who used to maintain one of the original resource sites many (many) years ago, still maintains his own database of over 1200 companies in our space, is now working on updating it (which he tends to do biannually or triannually), and will, over the next few months, publish starting lists of vendors in each of the 10 core areas discussed in this series along with an indication of the market-size(s) they are best suited for so you have a starting reference point. It’s not much, but maybe it will help some of you and provide an incentive for the smaller analyst firms to do more. They need to collectively cut through the noise because every Procurement organization who has a bad experience is another Procurement organization we collectively lose for a few years and another voice that’s not spreading the message of how important modern S2P technology is.
And while this wasn’t the post you were hoping for, as the doctor knows you need help breaking down the internal barriers to new solution acquisition (and you assumed the doctor would be talking about that in this post), this is an unspoken reality that, like an elephant in the room, needs to be addressed.
So, onward to Part VII!
*1 At the time of this writing, the doctor is not a Spend Matters analyst, has not been one for seven (7) months, and receives no benefit from you purchasing any Spend Matters solution. However, he cannot deny it is still the ONLY map on the market that is based on tech and hard, well defined, scales. So he cannot overlook the value of these maps and be fair to you, dear reader. (Compare this to the random mish-mash of soft objective factors that the majority of analyst firm maps are based on where the ultimate ranking is utterly the opinion of the analyst who may or may not fully understand the solutions that are being ranked — and the discrepancy in the results that arise if the analyst firm has multiple analysts ranking vendors on the same, soft, objective scale that is open to interpretation.)
*2 There are advantages to these suites, especially if you are a larger enterprise that can afford them, as the modules are integrated out of the virtual box and the vendor can turn them on with the flick of a software switch, but there are also disadvantages as well. If the best-of-breed solution you want for a particular module or need to solve a particular problem isn’t already integrated, it could be a while to get it integrated, if you can get it integrated at all (as sometimes only “partners” are supported [and allowed] by these vendors). Plus there’s mapping the data models, API calls, etc. — you’re locking into an ecosystem when you select a suite.