There is No Super-Selection Map for Source-to-Pay

In a post on comparing the Hansen Fit Score to other analyst ranking maps and methodologies, THE REVELATOR asks “which would you choose, and why”, to which the doctor responds that THE REVELATOR has to be a lot more specific, because, depending on your context, there could be three choices

1) The Hackett Group Inc. KPIs for zeroing in on what type of technology you should choose for the biggest boost to your business as there’s no arguing with their book of numbers. But this doesn’t give you a shortlist.

2) Spend Matters, A Hackett Group Company Solution Map for deep tech assessments, allowing you to qualify tech for consideration before doing a deep dive assessment on business needs (and we all know that most people can’t do this effectively). Once you know what module, or modules, you need, SolutionMap will give you a qualified list of the best, rated, vendors with those modules.

3) Jon W. Hansen fit score for sieving a shortlist of relevant vendors who make the tech cut into the 3 most likely to be the best organizational fit to invite to the RFP where they can prove their worth AND interest in actually making your organization successful

However, the optimal route, if you have the time and money, is 1, 2, 3 … (and let’s face it, since this could save you millions, you likely do). Why? When you use

1) you focus in on the specific problem set/module (set) to attack first for the biggest impact

2) you filter down to those providers who have the tech to do it

3) you filter down to those that would be right for your business on the other dimensions 1 and 2 does not address.

However, none of these approaches can

0) perform a gap analysis, determine what problems you need to solve, and help you center your analysis on the right metrics or numbers or

5) take the short-list you are left with after using Spend Matters Tech Match (built on Spend Matters Solution Match) or the Hansen fit score and construct a proper RFX to help you determine which vendor will provide you with more than a license but work with you to implement, and execute, a proper solution.

And that’s why there’s no super selection map for source-to-pay!

(And please remember, never use a big analyst firm quadrant map because vendors have lured big analyst firms astray.)

Don’t Get Misled By Overly Simplistic Comparisons!

A recent post on LinkedIn on Coupa vs. I-Valua that implies it’s always Coupa vs I-valua or that Coupa is better is missing the point entirely. So much so, that the doctor had to call it out (see the initial LinkedIn response here) because it ends up being very deceptive (even if that wasn’t the intent).

The post made a very simple comparison between Coupa vs. I-Valua in big graphical format that basically said the following:

Coupa I-Valua
1 Billion in Annual Sales, inc. 2006 200 Million in Annual Sales, inc. 2000
Considered Innovation Leader Can Be Customized to Specific Needs
Generally Good Customer References Customers Have Mixed Success

So much wrong with this!

1) Revenue size is in no way indicative of a company’s particular ability to serve YOU. As long as the company is financially stable and has enough support staff for an organization of your size, that’s all you care about. (And it’s obvious they both do since once a company surpasses 100 Million in annual sales, it can serve the vast majority of enterprise clients.)

1b) Neither is time in business relevant once the company has been in business long enough to have a mature solution.

2) “Considered the Innovation Leader” is either opinion, not fact, or bland, marketing BS. By who? The market at large? Well, guess what, in this scenario neither Coupa nor I-valua qualify — Zip is the current darling of ProcureTech. (But don’t go there … please … don’t go there! [Or we’ll have to rip into that assumption too. For now, we’ll be content in reminding you that, despite what Zip claims, there are NO FREE RFPs.] To keep it short and sweet, Zip’s S2P capabilities are still relatively non-existent as it was built as an orchestration platform to connect existing systems and make them work better, and what they offer to plug the gaps you don’t have is not anywhere close to Best in Class.)

3) As Joel was also quick to point out in the comments, good customer references depends upon who you ask (and many of us who have been in the space a long time know that both vendors have very happy customers, some unhappy [former] customers, and customers who are generally satisfied (but wouldn’t go out of their way to give a recommendation). At Spend Matters, where I developed the Source-to-Contract Solution Maps, in the first release, I-valua was top dog and Coupa was average on the customer ratings. As more references poured in, I-valua dropped down to average and Coupa climbed slowly. In other words, both have great customer references, both have average customer references, and both sets of providers have a customer base with mixed success. (And you can’t always blame the company for the success or failure, both sell very advanced solutions and sometimes customers insist on a module they aren’t ready for.)

Furthermore this comparison misses multiple key points that need to be taken into consideration in any comparison, which include, but are definitely not limited to:

4) Simplification is key — and both platforms can simplify extensively! However, the approach is different — Coupa, in simple terms, gives you default configurations that are easy and widely adopted. I-valua built the infinitely customizable platform, and YOU have to work through that process to get it simple. In technical terms, I-valua was built for power users, Coupa for tech novices, but both can be configured to a middle ground.

5) There are more than 2 suites! While Coupa is a finalist in most deals (due to market size), depending on the industry and geography, the final “2” could also include SAP Ariba (yes, still), Jaggaer, GEP, Zycus, Oracle, Corcentric (Determine) or Synertrade, especially in enterprise deals, with another half dozen or so smaller suites emerging in the mid-market. And, for a subset of those deals, Coupa is definitely NOT the best. Sometimes it’s not even close!

5b) While Coupa is undisputedly one of the indirect (sourcing) market leaders, it is still very weak in direct sourcing compared to some of its peers (especially when compared to emerging players built for direct from the ground up). Classically, it had no direct support. The Trade Extensions acquisition gave it support in advanced sourcing and the Llamasoft acquisition gave it direct support in supply chain demand planning, but direct was never at Coupa’s core. For direct industries, it makes a difference. (To be fair, most of Coupa’s peers weren’t built for direct either, but Jaggaer acquired Pool4Tool, I-valua acquired and rebuilt DirectWorks in their platform from the ground up, GEP built NEXXE for supply chain to supplement its weak direct capabilities in SMART, and Synertrade was built from the ground up for direct – one of the few suites that was.)

I could go on, but, with over 666 companies to choose from, it’s never just Coupa vs. someone else, or I-vlaua vs something else. Sometimes neither of them should be in the room. Evaluate the alternatives. And do so after you know your core requirements, as that’s what you need to narrow down to a relevant pool of providers.

And also, you need to consider your sources when you see very simplistic one-side comparisons like these. While there may not be intentional bias, the relative knowledge the author has of different solutions will weight the comparison if the author is not an analyst who has rigorously, and objectively, weighted each platform side by side on its technical merits alone! (Which the doctor did for six years in this case, along with many of the other big names listed above.) (The Spend Matters solution map was a deep technical solution map with over 600 areas of feature/function/process evaluation on the tech axis [and dozens of questions on the customer axis] for a reason. Comparisons are NEVER this easy between suites and sometimes the usual market leader, for your organization, is the default market loser.)

In this situation, the post author’s company does a LOT of Coupa-related platform advisory, the post author has experience with Coupa that predates that in professional CPO or equivalent roles, and is one of the few consultants out there who has a good understanding of the Coupa platform. (And, by the way, there aren’t many of these consultants, especially when you consider that Coupa doesn’t really know Coupa anymore! The only two employees who knew the entire platform end-to-end, that contains over 20 acquisitions over the years, left last year. And the last few years also saw the departure of key personnel from acquisitions that gave them their advanced analytics, optimization, and risk capabilities. As for the doctor, he’s been following Coupa since Procurement Independence Day and consulted for, advised, or did diligence on half their acquisitions over the years. He’s one of the few that probably now knows the core of Coupa better than Coupa, and knows when someone, like the post author, knows a platform well.)

So if you need help identifying the right vendors to consider, and guidance on how you should be comparing them, seek out the niche analyst firms and independent analysts who have been covering the space for over two decades — they’ll give you the right list of vendors to look at, the right factors to consider, and can even help you craft the right RFP. (Unlike the big firms who just publish the same maps with the same vendors who happen to get a ranking that often just happens to be highly correlated to how much they pay the firm. [Remember, vendors have lured big analyst firms astray.])  And when you need help on a shortlist, seek out the consultants who have actually implemented multiple players on that list for their advice.

Forget Best in Class, Hype, or Futurism — If You Want To Improve, Mature!

As you know, and as we’ve written about repeatedly, the hype cycles for orchestration and Gen-AI are in full swing (even though both should be declining, they are both picking up steam, likely due to the ridiculous amount of money spent on marketing — which includes vendors buying analyst studies and reports that focus on areas where they look good).

Consultancies are not only trying to promote and sell you these technologies as a panacea for all your technology ills, but also trying to tell you that it’s what the best-in-class do and, by the way, that if you want to be best-in-class, you have to upgrade all of your processes (with their help) to those that the best-in-class use (whatever that means).

Furthermore, both are trying to tell you what the Future of Procurement is in 2030, 2035, 2040, etc.

And the reality is that NONE of this helps you. Not one bit.

As we have repeatedly pointed out, most of the currently hyped technology is still in experimental/beta stages. This is not technology that will help you mature. In fact, if you are not an industry leader, and mature in your processes, it may actually hold you back because you need to be a mature industry leader with your Procurement organization running smoothly to have the time and experience to properly evaluate these technologies and where they might fit in your organization.

Furthermore, every organization is different. As a result, what is a best practice for one organization may not be a best process for another. In fact, it might not even be relevant. While you will need to improve your processes, and streamline them for digitization, there is no set of fixed processes you can just plug and play and succeed.

And, don’t pardon my French, why the fuck would you care about what Procurement will be like in 5, 10, 15, 25 years. That does NOT solve your problem today. You care about what a better organization would like today and how to get there. That’s it. Just like the journey of a thousand miles begins with a single step (and possibly a single kick in the ass), the path to success is continual improvement, and, simply put, doing better tomorrow than you are doing today.

This means that the key to success is good old maturity levels, current state assessments, and simple step-by-step plans to get from one level to another. Nothing fancy. Nothing tech-centric. And definitely nothing hyped!

While the doctor admits he did get a little tired of the plethora of these maturity maps that appeared in rapid succession in the late 2000s and early 2010s, including the one he did, it was much preferable to today where the dearth of these, and simple advice, is deafening. The help that is desperately needed is not there — replaced by (Gen-AI generated) (Gen-)AI and orchestration hype, not how they can (and cannot) support the solutions you need.

[Plus, let’s not forget that analyst firms and consultancies tend to ignore government regulations and industry compliance (except in country-specific studies), day-to-day pain points (because they aren’t sexy and won’t sell the hype), and, unless they can make a quick-buck (or get a major uptick in eyeballs), changing global conditions that require (temporary) supply chain pivots.]

So, if you truly want to improve, find a maturity model that walks you through the process and knowledge improvements you need to

  1. get to where you should have been when you started Procurement
  2. get to where you should be today
  3. prepare for the next 3 to 5 years (since no one looks beyond that anymore)
  4. slowly build out a foundation that will take you beyond that (without another massive investment)

That’s it. That’s how you make progress. And how you do it without flushing Millions of Dollars down the (Big X) consulting toilet.

Need a starting point? You can still download the classic paper the doctor wrote back in 2012, that was sponsored by BravoSolution (acquired by Jaggaer), on Taking the First Step on Your Next Level Supply Management Journey which describes the levels of maturity from standardization and complexity reduction (which is typically the first step an organization takes on its journey), to operational excellence (which is typically the second step an organization takes on its journey), to strategic business enablement (which is when it typically becomes best in class).

If you do a web search, you will find others from the big consultancies, but this gives you an idea of what to look for in a model that you can build a progress plan on. Where do you start, where will go next, and where do you want to end up. Note that a good model is tech free. Tech should support your growth, not the other way around. (In other words, it’s never Tech-First or AI-First, it’s solution first, and then you identify the right tech.)

And if you need help with a current state assessment, or flushing out a roadmap from one level to the next, or where you are now to standardization and complexity reduction, hire a niche consultancy who will take a no-nonsense approach to get you there at a reasonable cost. (This shouldn’t cost millions of dollars in a transformation project. Depending on your organizational size and complexity, somewhere in the low six figures should typically be enough to get your started, or mid to high five figures if you want to just focus on a few core areas at a time. But definitely NOT seven figures. That comes during the transformation process once you have identified the tech you need, and NOT the tech everyone is trying to shove down the proverbial throat.)

You Don’t Need AI and Agents. You Need Solutions That Solve Your Problems.

In our last two posts we told you that not only is AI and Agent(-based) tech not new, because:

  • AI, which really stands for “algorithmic improvement”, is at least 69 years old (and is just the label that is slapped onto every algorithm that was, and is, slightly more advanced than the algorithm that came before)
  • there’s fundamentally no difference between RPA, that we’ve had since the early 90s, and an “agent”
  • the “orchestration” hype machine is not new either, not even on the web; WWW: 1989; CORBA: 1991
  • all automation is based on workflow, a concept that dates back at least until 1921 and was found in early MRPs in the 1970s

but that:

  • slapping an LLM-powered chatbot doesn’t make it innovative or new,
  • you need a solution, not a platform for building one (and that’s all you get with these new Agentric AI startups), and
  • you shouldn’t pay for the privilege of developing a vendor’s solution for them (as that is what you are paying them for)!

At the end of the day, you need a solution that aligns with Procurement’s needs. And if the vendor is not capable of providing such a solution that has already been built and demonstrated in real companies to solve the problems you need to solve, then a Procurement department shouldn’t even be talking to the vendor (and definitely should not let them participate in an RFP).

Right now we have technology failure rates at an all time high. The last major study (from Bain) puts them at 88%, but there are plenty of indications (from multiple smaller, less reliable studies and statistics from smaller consulting firms called in to analyze a situation after the fact) that the rate could now be as high as 92%. That means you have roughly a 1 in 10 chance of succeeding with your ProcureTech project, and your chances go down if you choose a vendor without a suitable, proven technology.

We have to stop being blinded by the hype constantly shoved at us by the AI and orchestration players and go back to basics. Define what we need, how it has to support us, and evaluate existing stacks against those requirements. Design appropriate RFPs that focus on actual process needs, not feature functions; enhancement of existing ecosystems, and not full blow replacements (as big-bang implementations always result in big booms, and have caused about half of the greatest supply chain failures of all time); and critical system and data feed integration against your existing, not just general capability.

Script the key requirements for demos and ensure that the first demo demonstrates all of the requirements before they make the cut for the second, where they can tackle the nice-to-have requirements and show off their unique capabilities.

Ensure that there is a well thought out and laid out implementation plan that clearly lays out who will do what, when, and what is expected from the other parties at each phase, and when the necessary requirements need to be met. Specifically, what resources will be needed from you, when, and for how long. What APIs / integration access points will be needed, when, and how will testing be done. What IT resources will be needed to support. If a third party is being used for the implementation, what support will they need from you and the vendor and what commitment is there that the vendor will provide all the necessary support on time and respond to the SLAs if something goes wrong?

And ensure you have a project assurance plan in place with a third, or fourth, party helping you manage the vendor(s), manage the project requirements on your side, and keep all parties in lock step. And you need to make sure you budget for this, because it won’t come out of the vendor’s budget. (But since the #1 goal of the vendor is to make their numbers before the investors kick the sales reps and/or the management team to the curb for not meeting unrealistic expectation, you can’t rely on the vendor to ensure everything is to your liking.)

We have to remember that, these days, too many Procurement solution providers are treating the market as a necessity (or a luxury). If I’m hungry, and you’re the only one with food, then, since I need to eat, I have to adapt to what you have. (And if I’m rich, then I need to be cool and therefore must need to eat at your five star restaurant to be cool … )

This is despite the fact that NO company needs ProcureTech! Even though it has existed for over 25 years, many companies are still functioning without it today. (And some have functioned without it for 25, 50, 100, or more years.) While they are worse for wear running off of email, Excel, and decades old ERP, especially compared to their peers, the fact that they are managing, somehow, proves that they don’t need it. They want it because they know it will make them more efficient and effective, but they don’t need it. But vendors have forgotten this, so ProcureTech departments should take the time to remind them during the process that they’ve survived X years without it, so there’s no reason for them to rush the process until the vendor has proven they are the solution.

Which means that a Procurement should ONLY buy ProcureTech IF it makes their life better, and that they should only buy from VENDORS who have existing tech that makes their life better. It’s the job of the vendor to build this tech and demonstrate that it works, NOT the buyer. A good vendor with solid tech who has been building that tech for half a decade or more will easily, and happily, do that, while a new startup with nothing but a low-code platform that cobbles together random LLMs/LRMs won’t be able to (as they have to “develop” it with you). Choose the former.