Category Archives: Market Intelligence

Per Year, How Much Should You Outlay for a Multi-National Enterprise Source to Pay? Good Question! Poor Answer. 500K+

Whereas we were willing and able to put a real, actual, number, or a very tight range, for mid-markets, the situation gets more tricky for a multi-national enterprise with 1 Billion + in Revenue.

Why? Aren’t they using the same advanced tech as a large mid-market, except using advanced capabilities across the board? And, because of this, shouldn’t it max out at 500K? Well, yes, but there are additional considerations you don’t have in the mid-market.

[01] If you are using a lot of decision optimization, semantic analysis, network modelling, etc., then you are using a lot of computing power — that’s driving up the vendors’ hosting costs well beyond the mid-market. Now, at some point, it maxes out at costs on a dedicated machine basis, but it’s still higher.

[02] As a true multi-national enterprise, you are going to need a vendor that has extensive multi-lingual and multi-currency support in the product AND at the help desk when suppliers and third parties have difficulties using the solution to bid, provide information, submit invoices, etc. And while it’s only a one-time cost for a a suite built for true internationalization to add another language pack and currency, an enterprise that offers support in those languages usually has to add more headcount to support that language, and that adds cost.

[03] You’re not only going to have a larger Procurement team using it, but you’re going to have a decentralized global team with a lot more differentiation in capability, with a lot less people capable of being full DIY. They’re going to need more support on a regular basis, and you’re going to need to contract for this up front.

[04] You’re going to need a lot more data. You’re going to be subject to a lot more regulations and you’re going to need to collect, and verify, a lot of data on your partners and suppliers. A LOT of data. You’re going to need a number of data subscriptions on business identifiers, (beneficial) owners, and credit scores for verification that they aren’t on any embargo lists, involved in any legal suits, and acceptable to your insurance provider. Then you need data on their human/workers’ rights practices, compliance, and third party assessments for those countries with laws enforcing compliance and putting you responsible for your supply chain actions. Then you need Carbon/GHG data for countries with reporting requirements or limits. Then you need other ESG/Risk data for your own internal risk assessments. And so on. These subscriptions add up.

So even though the suite itself should still be within that 250K to 500K per year range, when you add up the additional support needs, additional data needs, and dedicated computing power needs, you’re going to double or triple that cost. That being said, before you sign on the dotted line, especially if the quote gets close to 7 figures (one million), you need to do your expected ROI calculation. If you’re not going to see at least a 5X ROI a year on a conservative estimate, with an expected ROI of 7X to 10X a year by years 2 and 3, you need to step back and decide if you need all the functionality, all of the support, and all of the data subscriptions you’re asking for / being quoted, and if so, if you’ve included the right vendors in your RFX for (a) technology solution(s). The reality is that you should NOT be paying a million plus annually for an extended S2P suite unless you’re getting the ROI.

Also, be sure to build that model in-house or engage a third party that is not a reseller or implementer of the suite you’re considering. First of all, their savings averages are not guaranteed to be applicable to your situation. Secondly, their manpower requirements, and reduction, averages might not be appropriate for your business either. Thirdly, because they often build their savings model as a rollup of savings models across the different modules / functions, many of these suite models often end-up double-counting resource time or savings numbers by way of their design.

(Please note our choice of wording here — “end up“. Usually the provider or consulting organization is not trying to deceive you, and they often don’t realize that their roll-up model is double counting. What we’ve seen happen is they take the best calculators they have access to (through consultant or analyst relationships) in each area they are selling in the suite — sourcing, SXM, CLM, etc. — and then roll them up. But they fail to understand that the attributions of a savings percentage in each model always favours the solution/module being sold, which may also assume some baseline functionality of another module. As a result, especially since the savings opportunity often changes based on what technologies are available and applied together, all the estimates will be “Best Case” for the selected modules, and when you add those up across five/six modules, you will sometimes get a total “Best Case” that is as much as double what is actually reasonable. For example, you can have a category where if you just applied spend analysis on the RFX you could identify 6% savings, if you just applied supplier risk profiling to the RFX and eliminated the high risk suppliers and then took the low bids you could identify 4% savings, and if you just applied strategic sourcing decision optimization you could get 10%, but if you applied all three you only achieved 9% (since optimization finds everything spend analysis finds, but the risk assessment resulted in the manual elimination of a high risk supplier that optimization didn’t catch, lowering the initially identified savings opportunity). Rolling up 3 separate models, it would produce a 20% savings opportunity when it was in fact 9%. Now, in other situations, the rollup could be worse than the actual of combining all three technologies, i.e. the RFX is projected to only identify 3% on it’s own and the negotiation module to save 3% on overheads, but the application of both to a targeted subset of suppliers which are deemed to be most willing to negotiate based on volume could allow for an 8% reduction. But overall, these rollups don’t average out and usually over-count.)

[Also, most vendors feel they have to do it this way since most buyers don’t buy all the modules and they don’t have enough average savings data across the application of all advanced modules to all categories to have reliable numbers. So you really need to do your own models based on your own situation and come up with realistic estimates.]

Depending on your current state of affairs, current market conditions, and technologies available that your organization is actually capable of utilizing, that could be an overall, estimated, cost reduction of 3% against all spend expected to be put through the platform in the first year, or it could be 5% (or more, or less). Even 3% is good if you’re spending 1 Billion a year, 500 Million is addressable, and you think you can address 20% of that, or 100 Million, the first year. That’s an estimated savings of 3 Million, and if your year 1 cost was 750K, that’s reasonable with an ROI of 4X, especially if you think increased efficiency will come in year 2 with familiarity, that you will address 200 Million in year 2, and increases the estimated savings percentage to 4%, which would be 8 Million savings in year 2, and an 8X multiple even if you needed to add more data subscriptions and support, bringing the total solution cost up to One Million.

Probably not the answer you wanted, since the mid-market looks to be getting off cheap, but they are also spending less as an organization, addressing less of that spend, dealing with fewer volume or consolidation opportunities, fewer resources to tackle the mid-size categories, and losing on the tail since they can’t effectively manage it beyond catalogs, budgets, and hoping the 3-bids and a buy are fair (and not rigged through collusion). They might pay less for their S2P solution suite, but their total savings potential is also (considerably) less and, thus, their typical ROI is limited compared to yours.

But, well chosen, at least you’ll get an open, modern, usable solution for One Million dollars per annum — not something you can say in all areas of enterprise software.

Per Year, How Much Should You Outlay for Source to Pay? 120K!

That’s right! We’re putting a stake in the ground on a real, actual, number! ( With caveats, of course, but still, a real number. !)

The one question everyone asks, but no one wants to answer, especially in North America, is how much? Most vendors want to get as much as possible, so most obscure their (true) pricing. Their analyst clients want them to get as much as possible (as they all dream of the day they get that Million-Dollar PO from a vendor in exchange for simply keeping the vendor at the top of the charts). Clients who think they got a deal don’t want you to underpay (and then have their renewal prices hiked up as the vendor seeks to maintain it’s profit margins) … and clients who think they’ve overpaid don’t want to tell you. And when some of the bigger vendors won’t even talk to you unless they think you’re good for seven (7) figures (i.e. One Million Dollars) a year or more, you might be tempted to think good (DIY) suites are out of your grasp.

They’re not. And if you’re smart, they can be quite affordable, and lead to not just an identified, but realized, ROI in a short time frame.

But first, here the first set of caveats around the 120K number:

[01] You are a true mid-market company, which we’re defining as a company more-or-less between 500 Million and One Billion in Revenues and an addressable spend of 250 Million to 500 Million (as you can’t address payroll, government controlled utilities, mortgages/long term lease rates, etc.).

[02] You have an average sized procurement team of under 30 people. (In a 2019 Benchmark, average organizations had 33.5 Procurement personnel per 1 Billion in revenue.)

[03] You’re doing an average number of projects per year for those people (and likely only strategically addressing 20% to 30% of the addressable spend per year).

[04] As you have (next to) nothing in terms of modern source-to-pay technology, your primary focus is the baseline capabilities (as defined in our Source-to-Pay series). You might want a few of the more advanced capabilities, but right now, getting the baseline (which will likely provide 80% of the value by allowing you to get all of your processes, and costs, under control) is the primary goal.

In other words, you [1] aren’t a large multi-national global enterprise (or small business with less than 100M / year going through Procurement), [2] don’t have a large team, [3] aren’t going to be driving the CPU utilization through the roof, and [4] aren’t expecting the top technology across the board (as industry average functionality or better is enough). In this situation, the vendor’s stack and (virtual) data center delivery costs are not ridiculous, it’s support requirements are not high, and it’s maintenance costs are predictable (as it’s not doing anything super complicated and novel in the tech that could require scarce talent). 120K is not only affordable, but sufficiently profitable (with a few more caveats that we’ll get to below).

But I’ve never seen a quote that low!

Where are you looking? Oracle? SAP? Those are primarily ERPs, selling on an old locked-in-for-life model (thanks to ridiculous up-front costs that accountants need at last 10 years to amortize). Coupa? That’s one of the largest super suites on the market with S2P, Finance, Supply Chain, Power-Apps, and very advanced capabilities (through one of it’s almost two dozen acquisitions) that many companies don’t need and may never use.

The reality is there are perfectly good (and sometimes best-in-class) solutions for:

  • Spend Analysis that are less than 24K/year for enterprise licenses
  • e-Sourcing (RFX/Auction) that are less than 24K/year for enterprise licenses
  • CLM (primarily Governance and some Negotiation support) that are less than 24K/year for enterprise licenses
  • Supplier Management (primarily Information/Relationship with some Compliance/Performance/Risk) that are less than 24K/year for enterprise licenses
  • P2P that are less than 24K/year for enterprise licenses

which adds up to 120K. Plus, there are some smaller, lesser known, complete S2P suites that have all of these core baseline modules for subscriptions less than 10K/month (120K/year), which, for a multi year deal, will even slide in slightly under 100K for a quick deal (i.e. 8K/month vs. 10K/month).

The other caveats are:

[05] This does not include integration costs, training costs beyond access to all of the online-training materials/virtual academy, and the implementation costs are limited to flicking the switch to activate the license and any necessary setup configuration.

[06] The sales cycle is mostly virtual (web demos, video conference meetings, etc.). You won’t get to meet the sales rep in person more than once during the sales cycle (and that’s only if you’re buying a mini-suite or a multi-year deal; these vendors stay affordable by keeping their costs down, and multiple on-site demos and meetings do nothing but drive up overhead and costs).

[07] Most vendors will help you with the initial data load (provided you are loading data from a supported system in a supported format), but refreshes will typically not be included in the ongoing support, which will mainly be limited to online help and workaround support for identified bugs while the bugs are being fixed.

[08] This will typically not include any data enrichment offerings also offered by the vendor, especially if those data enrichments are coming from third parties, but these will be pre-integrated and you will only pay the third party fee if you want to turn them on.

However, [05] it’s SaaS, and most integrations should just be data loads, and since most modern tools have fully documented, fully open APIs, this is something that, if not out-of-the-box, you can open quote among your verified service providers and get reasonable rates on. [06] the pandemic finally proved to stragglers that you can do business online, even if you don’t like it; and when you consider that insisting on everything in person when every 3 person trip adds at least 10K of cost to what could be a lower cost product, why insist on in-person when not necessary. [07] once the initial data is loaded, most of the data will be created, and live, in the system. [08] you’d always be going to a third party for data enrichment anyway, so it’s unreasonable to think the SaaS provider should include it in their price.

So, even though there are a lot of caveats, none are unreasonable and none should impact the value you can generate. And as per our recent piece on Five Easy Mistakes Source-to-Pay Tech Buyers Can Avoid , given that you’ll realize quite a bit of up-front value just by getting a tech-enabled process in place and capturing all the spend (which you can then analyze for true opportunities), you don’t need to spend more (until you identify which advanced functionalities will actually provide more value and then you can go out and buy those modules / augmentations one-by-one as you need them, and chances are there won’t be that many that the organization will actually get enough use of to justify the purchase).

And what if you already have a first (or second generation) solution and are ready to upgrade to a leading third generation solution with multiple (fourth generation) advanced capabilities? Or you just hired an experienced Procurement team used to working with advanced technology and are ready for / need multiple advanced offerings? (Or are borderline enterprise?) What should you pay then?

To be continued.

A Critical Sixth Mistake Most Tech Buyers Make — in Source-to-Pay and Beyond!

To infinity and beyond isn’t just the goal of Buzz Lightyear, it’s also an accurate description of how often tech buyers make this critical mistake. And what is this critical mistake?

Not negotiating an easy, full, self-serve, cost-free, 100% DATA OUT clause in the contract — and forcing the supplier to prove it works one third (or one half) of the way into the agreement.

Sure, buyers always ask “can we get our data out if we choose not to renew” and sure suppliers always say “of course you can get a full data dump“, but the supplier rep is always going to say yes after the developers say it’s possible (but that doesn’t mean it’s encoded in the product, and more often than not with older platforms it requires the tech team to do the data dump — which might be more difficult and take a lot longer than they expect because they are using a shared database, have data and files split across multiple databases / servers, or they can only extract data a few files / tables at a time — and it might even come at a huge cost for their time), even if it’s really not. (It’s not just whether or not the development team can extract the data, it’s whether or not they can do so in some sort of standard format that would allow you to at least load it into a standard database or file storage system.)

The most important thing to remember is that even if a solution is the perfect fit for you now, it does not mean it will be the perfect fir for you next year, and by the time renewal comes up, due to changing organizational needs, changing provider directions, or a combination of the two, it may no longer be appropriate at all. Should this happen, you need to be able to migrate to a new solution quickly and easily, and this will require being able to extract all of your data from the current platform, self-serve, in a standard format that you can then push into a new platform as soon as that new platform is identified.

The only way to ensure this is to insist on a clause in the contract along the lines of the following:

The platform will contain a self-serve feature that will allow a buyer administrator to export any and/or all data in _____-format (e.g. XML, flat-file) in accordance with standard _____ (e.g. cXML, SQL) in a format that will allow the data to be immediately loaded into _____ (e.g. SAP, mySQL) application by executing a single load control-file/script. Attachments, if not stored in the database, should be capable of being downloaded in a (multi-)part ZIP file, with names and relative directory paths matching any indexes in the database directory files. If still in development, this capability must be fully implemented before one third [or one half] of the subscription term has expired.

Furthermore, on or before YYYY-MMM-DD, the supplier will walk the buyer administrator through a test of the export process wherein the buyer will self-serve export all of the data and then load it into a test instance of the indicated backup system. Should the test fail, the supplier will be subject to a monthly subscription penalty of X% a month until the functionality is complete and the test succeeds. Should the functionality not be finished by the time two thirds [three quarters] of the subscription term has expired, the supplier will be subject to a monthly subscription penalty of 2X% a month (as the buyer will have to invest in manual effort to recreate critical data in backup systems).

Any supplier that objects to the first part of the clause is likely NOT one that you want to be considering as most modern platforms support full data import and export through APIs and are built on the principles of data sharing. Furthermore, if the platform still doesn’t support export in a standard format, but claims they are working on it, you should expect most of the capability within a year if the platform really is serious about joining the modern data sharing club (and, thus, should not balk too much at the second part of the clause if they truly are serious as it should only take a few months to figure out a good export module for even a large schema).

Depending on how much data you produce, and how much manual effort it would be to manually recreate a copy of the data you can’t extract, X=20% would not be unreasonable in our view.

Finally, note that this requirement not only protects you in the situation where the platform isn’t right for you, but also increases the chance the platform will be right for you, as a platform that supports open data integration can usually be augmented with ease if you need additional functionality in the future, but don’t necessarily need a whole new platform as the current platform still does what it was purchased to do just fine.

Five Easy Mistakes Source-to-Pay Tech Buyers Can Avoid

For every win you hear about (usually in the form of some ridiculous “we saved X Million thanks to Big S2P Suite Installation“, but that’s a rant for another day), there’s always someone muttering under their breath how their Source-to-Pay module or suite was a partial to complete failure. The reality is that any tech solution, no matter how good it may be for someone else, can be a dud for you if you aren’t careful about selecting the right type of solution from the right vendor.

That’s one of the reasons we are doing a large (initially 33 part) series on Source-to-Pay right now, so that you get an understanding of what each core module should do, and could do, can figure out what modules you need now, and identify the core features that are a must have. This isn’t the full picture, and we can’t provide the rest of it in just a single post (and have written dozens on the subject in the past), but we can outline five mistakes that, if avoided, greatly increase your chances of (great) success.

Lack of understanding of the real value proposition from tech

This is probably the biggest, and the main reason we indicated that, once you have a solution in place that captures all of your spend data (i.e. e-Procurement baseline), you should do a spend and opportunity analysis to understand where the real cost control opportunities are. (Notice we are saying cost control, not savings, as you don’t get savings until you have processes and technology in place to actually capture the savings you identify. Otherwise, you identify the possibility, but don’t actually capture them. But don’t get us wrong, your costs will go down, sometimes significantly, but properly selected and implemented source-to-pay technology should deliver two rounds of cost reductions — an initial round when you start capturing all of the opportunities you previously identified, and then a second round when you are able to start using it to identify new cost reduction opportunities.)

The key here is to understand, for a given solution, how much cost reduction you can reasonably hope to capture in years one, two, and three (given that you will likely have to sign at least a 3 year subscription agreement to get a decent subscription rate), and what the total cost of ownership is going to be over those three years. (It will be more than just subscription cost, there will be implementation and integration costs, training costs, and internal costs when your IT team is working with theirs to make it work.) If the total cost reduction that can be reasonably (read: conservatively) expected for the first three years is not at least five times the total cost of ownership (with at least a 20% buffer), chances are that either the value proposition is NOT there (or you don’t really understand what it is yet and should either research further, find a different vendor, or, most likely, move on to another module).

Not knowing your true numbers — for spend, suppliers, contracts, orders, invoices, etc.

This is kind of intertwined with our first mistake, but needs to be called out on its own. When doing the potential ROI analysis, you can’t make rough assumptions on how much spend by supplier/category (you’ll always be off, and sometimes considerably), how many suppliers (which will be way, way more than you think), how many contracts (which will always be too low, and you probably won’t be able to quickly find a significant number of those contracts if you don’t have a SaaS contract management solution), how many orders (and you’ll be low here as well), or how many invoices (which will be way more than orders as some suppliers will partial ship and partial invoice, may invoices will come in without POs, etc.). Get your numbers, then do your analysis.

Overvaluing the tech (and AI)

This is the biggest mistake you can make, and goes hand-in-hand with not doing the homework required to work out the real value proposition from the tech. Whenever you hear “we saved X Million with Big S2P Suite Installation” you should immediately ask all of the following questions in order:

  • how much of that was truly do to tech vs. actually instituting a process that the tech enforced (i.e. the implementation of a new supplier management platform also instituted a process that ensured all suppliers were properly qualified before being onboarded, which minimized future event time and, more importantly, prevented orders to unreliable, poor quality, and even fake suppliers and considerably reduced organizational loss due to bad suppliers — most of those savings were due to the process, not the platform; the platform would be correlated with the development processes it was then used to manage after the suppliers were onboarded)
  • of what was actually tech, how much of that was due to baseline capabilities, and how much due to advanced capabilities (that are semi-unique to that supplier’s tech and not widely/otherwise available); for example, if the tech in question was e-Sourcing, and the vendor was one of the few that offered decision optimization, how much of that was achieved just with the baseline RFX/Auction capability (i.e. best bids and standard award methodologies, lowest bid by supplier, lowest total bid by category, etc.) and how much additional savings was from decision optimization once ALL constraints were taken into account.
  • how much more the organization paid for that advanced capability and how often it was actually used / required to get savings [if it was only used 10% of the time, and only identified considerable savings half the time it was used, is it really worth it? or should the organization just do a one-off services project when those categories come up]
  • how much the savings actually relied on ML/AI, vs. just providing a fancy NL interface (when the same result could be accomplished through submenus or a few filter definitions / selections);
  • and if any savings can actually be tied to ML/AI (vs. good process and more predictable technology), what the risks of failure are here!! [i.e. if the savings were due to reduced stock-outs as a result of the “AI” doing auto-replenishment orders as needed to adjust to demand fluctuations, what happens if there is a temporary, extreme, demand spike due to a near end-of-life sale, will the algorithm assume that is a sign of demand resurgence and fall prey to the bullwhip effect, sticking the organization with tens of thousands of units it will never sell without a fire sale?

Basically, at the end of the day, more often than not, when a customer says “we saved X Million with Supplier’s Spectacular Solution“, you would gain at least 80%, if not 90%, of those savings by implementing any any other solution with the same baseline capabilities that enforced the same processes be followed. (And this is the best argument ever NOT to overpay. Paying 5X to 10X for an incremental 10% is usually NOT worth it unless your organization is a F500/G3000 with over 1 Billion in annual spend. Again, it’s all about that ROI calculation.)

Misunderstanding the SaaS provider’s viewpoint

Not the salesperson’s viewpoint (which is to sell, sell, sell and match you with the solution they think is the best fit so you will be enticed to buy), but the SaaS provider’s viewpoint. Regardless of what terminology the SaaS solution provider is using:

  • what are they actually selling now
  • what are they currently working on that you can expect to be completed before an annual roadmap revisit
  • where are they going with the tech (i.e. they are AP/Payments — are they doubling down and adding support for global payments and clearance in more countries, or are they just sticking to the basics [and only good for post-audit countries] and working on expanding into broader P2P or the new intake-to-pay/procure/process trend)
  • what is their support and training philosophy — all in-house, hybrid in-house and third-party (and you can/can’t choose), or all third party
  • what is their target market — preferred customer size, preferred industries, etc.
  • what is their philosophy on working with customers — do they take input? hold working groups? or do they just develop the features they believe are most likely to fill gaps or increase efficiency with little to no input to keep development rapid and costs down?

At the end of the day, if you don’t understand this for each provider you are considering, you won’t know if they will be the provider for you.

Failing to find the right relationship

This happens more often than not, partly due to not understanding the most appropriate tech requirements for your organization at the present time, and partly due to not really understanding both the culture of the provider and it’s viewpoint. True value materializes when you find the right tech from the right provider that will not only work with you to ensure you get that ROI, but has a vision that is congruent with where you want your organization to go.

Are these all the mistakes you can make or all the mistakes we’ve seen? Of course not, but these are some of the biggest, and if you avoid these, your chances of success shoot up considerably.

Dear Analyst Firms: Please stop mangling maps, inventing award categories, and evaluating what you don’t understand!


If there’s a place you got to go
I’m the one you need to know
I’m the map
I’m the map, I’m the map
If there’s a place you got to get
I can get you there, I bet
I’m the map
I’m the map, I’m the map

… but if there’s a tool you want to score
I’m the one you must ignore
I’m the map
I’m the map, I’m the map
if there’s a tool you got to get
I’ll lead you astray, I bet
I’m the map
I’m the map, I’m the map

It’s map time! (It’s always map time!) The 2*2 onslaught isn’t over yet (and may never be)! Prepare to be continually overwhelmed with cool graphics, big company names and logos, and no information you can actually use (as is). Why? Because when you map 6+ criteria or dimensions of information down to a single dimension, and 12+ dimensions of information down to a 2×2 grid, it’s meaningless. All you know is which vendor had a total score on two sets of 6+ criteria that was in the top percentile. But you don’t know if that’s because they are good across the board on those 6 criteria, or top score on 3 of those dimensions (in the analyst’s opinion) and average score on the other 3; or top score on 3 of those criteria, average score on 2 criteria, and below average score on the last criteria — which happens to be the core technology criteria that also happens to be the most important criteria to you!

It might not be so bad if all the criteria were different aspects of a criteria category — such as core architecture, product features, and integration under technology; or product innovation, service delivery, and operational efficiency under innovation — but you have a mish-mash of scores on the seven different dimensions of product capability, market viability, sales execution / funnel success rate, marketing execution / visibility, market responsiveness, corporate operations, and overall customer experience which are squished into a single execution dimension in one of the big name maps and a mish-mash of product specific capabilities, related application offering, integrations, globalization, technology, and customer references into an offering dimension in another big name map. It’s crazy! And useless.

And it’s also mind-boggling when you consider the significant effort some of these firms put into their research, the detailed reports they produce, and the great work that often results otherwise. (You may not agree with the analysts’ opinion of what a good strategy is, what true innovation is, what the appropriate product features are, or the scoring scales; but as long as all of the vendors are scored consistently, it’s still valuable insight that you could use in differentiating vendors to find the ones that might be the most right for your organization and your challenges IF all these scores weren’t mangled into one meaningless score you can’t use.)

So, dear analyst firms, please stop! You don’t need to to this. You can provide much more value by not creating these 2*2 mangled maps and either:

  • use a graphing technique that was made for comparing multiple dimensions visually, like a spider graph
  • score less dimensions and then do multiple 2*2s on the different dimension pairs
    (after all, when customers want to buy a solution, do those customers really care about how good a vendor’s marketing is or how successful the salesperson is? heck no! they care only about how good the product is, how well the vendor can serve them, how stable the vendor is, and maybe about how innovative the vendor is if they are forward thinking and want longevity)
  • create bar, or similar, charts on the different dimensions and then give customers a tool to build their own weightings meaningful to them

It’s bad enough these map-creation analyst firms are eliminating vendors from their maps based on criteria that range from somewhat to completely arbitrary, which can include, but not be limited to:

  • an arbitrary minimum on overall revenue in the prior year on software alone
  • an arbitrary client minimum
  • an arbitrary minimum on the average number of users per client
  • an arbitrary minimum on customer size for a % of the customer base
  • an arbitrary minimum on license fees (for the majority of the customer base)
  • an arbitrary list of core “features” that are absolute
  • an arbitrary exclusion of any solution deemed to narrow/industry focussed
  • some other arbitrary requirement merely to maximize the number of vendors that can be included … which might actually eliminate the vendor with the best or most innovative product or service! (Which entirely misses the point, doesn’t it?)

Given all of this, these firms could at least produce maps meaningful to the average buyers where those buyers could extract useful information from the maps as is!

“Two by two they’re still coming down
… the satellite circus never leaves town …”

Holy smoke holy smoke,
plenty bad mappers for the doctor to stoke
Feed ’em in feet first, this is no joke
This is thirsty work, making holy smoke, yeah
Holy smoke
Smells good

The only thing that is as annoying as these meaningless 2*2s is other analyst firms inventing award categories just to create attention for themselves when those award categories are totally meaningless and useless to end customers who have no clue what they mean or what the award categories are evaluating (especially when these award categories often mix vendors with completely different solutions) such as “insight“, “innovation“, “customer-centric” and/or “growth“. While we can be sure that every vendor wants to be seen as “insightful“, “innovative“, “customer-focussed“, and “growing“, that doesn’t tell the customer if the vendor offers a product or service, or if that product is e-Sourcing, e-Procurement, Risk Monitoring, or a simple carbon calculator. And if that’s the only category the vendor is listed in, well, that’s just useless.

I want to run, I want to hide
I wanna tear down the walls that keep them outside
I wanna reach out and set the flame
Where the sheets have no name, ha, ha, ha

I wanna see insight on the page
And see confusion disappear without a trace
I wanna take shelter, I can’t ascertain
Where the sheets have no name, ha, ha, ha

As a postscript, the doctor isn’t annoyed by all of the 2*2 maps (just the majority). Although they aren’t perfect, he finds that the Spend Matters Solution Maps that, in full disclosure, he did co-create (and which he no longer has any association with) are still useful as they are still focussed entirely on two dimensions: product (& underlying technology) evaluation and customer score. (As of V3, released Fall 2021, not due for update until [at least] Fall 2023.) The product evaluation is against an extremely well defined set of criteria where each criteria has a scoring scale that at least defines fledgeling through industry standard capability (and usually above standard as well) and the customer evaluation is done entirely by the customer completing surveys with no analyst interaction whatsoever (as any survey done by an analyst introduces bias based on the way the analyst asks the question and the tone the analyst uses).

The Solution Maps are two, and only two, dimensions that can be consistently scored by any analyst who scores on the product side and consistently scored against perceived value on the customer side. Are they perfect? Of course not! The product side contains some services questions (which are soft and more open to interpretation) (but were less than 5% of the questions); the customer side can be very subjective based upon cultural norms for that customer, customer stage in the relationship (new vs. longer term), and service level the customer subscribed to (and, thus, if there are only a few customer scores, one really bad or really good, out of range, score can really affect the average); and the weightings for the maps are still analyst interpretation of what criteria are most important for each market size, but it’s one relatively pure dimension mapped against another relatively pure dimension, consistently scored, and consistently weighted.  And that’s still considerably more useful than any other map currently is.

Plus, at least when the doctor was involved, there was only ONE requirement for participation: have a standalone solution you are willing to openly demo (without an NDA) and sign a form committing to participation regardless of where you end up falling on the map (which is all mathematically, and not subjectively, computed). So while you can’t say the top vendor is for you, you can say any vendor who makes the map likely has the core tech you need (as they need to at least be industry average) and likely enough customer service to get you going on it. You can produce a short list of comparable vendors that produce a solution of the type you are looking for, of various sizes (not just the biggest vendors), and know that the solutions are reasonably comparable. This allows you to focus on the other value drivers relevant to your organization in the RFP. And if the other maps gave you just granular insight into service, innovation, and any other dimension relevant to you, think how useful they could be?