Are Source-to-Pay Suites Dying...?

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Hi readers,

I hope you’ve had a great week!

If you’re a busy procurement professional who knows:

• Software has the potential to “level up” the impact of your team’s work

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…I’ve created a free weekly 30-min show for you.

I’ll cover a new piece of ProcureTech every week, including a demo.

It starts this Friday, September 6th. I’ll start by explaining how it works.

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Onwards!

📰 In this week’s edition:

• 📲 Focal Point’s new Coupa App (sponsored)

• 📋 5 procurement jobs that caught my eye

• 🏆 The Road to the ProcureTech Cup : Episode 1

• 🌙 Serious Questions for Your Source-to-Pay Provider

Let me know what you thought in the poll at the bottom of this email.
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ICYMI 👀: A recent, relevant Linkedin post:
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🌙 Sunday Night Note

Serious Questions for Your Source-to-Pay Provider

There’s something happening in the ProcureTech world… Can you feel it?

For the decade+ I’ve been in this space, Source-to-Pay Suites (S2P) were the default option when looking for software to support the Procurement function.

To illustrate, here’s the top 7 from the 2024 Gartner Magic Quadrant for Source-to-Pay Suites (in no particular order):

• GEP

• Coupa

• SAP Ariba

• Oracle Fusion Cloud Procurement

• Ivalua

• JAGGAER

• Zycus

• Etc.

If you’ve looked at Procurement Technology in the past, you’ve probably heard most of those names…

However, in the past 2-3 years, a generation of new challengers has been appearing: Intake & Orchestration (I&O) solutions. Their promise is to address the issues that remain unsolved by Source-to-Pay suites, most notably, getting you the benefits left on the table because of poor system adoption.

After many run-ins with I&O solutions over these past 2-3 years, I have to ask the question that’s on everyone’s mind in this space…

Are Source-to-Pay Suites Dying?

Short answer? No.

First, S2P Suites have an impressive install base. The most competitive ones also have “crown jewels” that give them a durable competitive advantage: their vendor networks/portals.

Second, the value of an integrated end-to-end suite of procurement applications remains attractive, especially for organizations without manufacturing-related purchasing that can bring 100% of their purchases into their suite. The value of a simple IT architecture (read limited integrations) is non-negligible.

That being said, I think I&O’s growth in this market is interesting because it gives procurement functions more options to help achieve their objectives.

Depending on company context, all of the below can be true:

• I&O solutions can completely replace the need for S2P suites

• I&O solutions can compliment an existing S2P suite setup

• I&O solutions lack the needed functionality to support Procurement’s needs

Factors like company size, geography, lines of business, industry, organizational structure, objectives, etc. can all serve to influence the correct answer in your business.

That being said, I think I&O has real potential to become “the new default” procurement software solution in the years to come, taking the crown from S2P Suites (let’s wait and see…).

S2P Suites are also investing in innovation and development. Perhaps S2P suites and I&O solutions are on a convergent path and will become one and the same…?

Time will tell…

In the meantime, here’s a list of questions you can ask your S2P Suite providers at your next Quarterly Business Review (QBR) to see if they are following the parade or stuck developing solutions for an old paradigm…

I’ve separated my questions for your S2P provider into 5 themes:

• Strategy

• Today’s Market

• Partnerships

• Innovation & User Experience

• The Future of the ProcureTech Market

Strategy

• What is your platform’s unique value proposition / unique selling point in the ProcureTech market? How does this compare to Intaken & Orchestration solutions?

• What is your criteria when prioritizing roadmap items?

• What ‘rabbit holes’ are you staying away from?

• How do you think about crafting a S2P Suite product development team that is both technically strong and functionally competent in Procurement/Supply Chain?

• What metrics drive your product team’s performance?

Today’s Market

• What are customers asking for today and weren’t asking for in past years?

• What are the key enablers to be successful when implementing a S2P Suite?

  • Where do you see most organizations struggle and what would be your top 3 recommendations?

• How should clients think about evaluating the Total Cost of Ownership (TCO) of their S2P landscapes vs. I&O or Best-of-Breed solutions?

• Lot of companies still struggle with master data quality as a key inhibitor of business value. What are S2P suites contributing as solutions in the short and long run?

Partnerships

• How are you thinking about partnerships with the rest of the ProcureTech ecosystem? Are you only partnering with solutions in verticals (read procurement processes) your solution doesn’t support?

• What does a “partnership” mean to your company? What are the requirements for a partnership? What are the benefits for your customers?

• How are you enabling partners and customers who want to leverage partnerships at scale? (e.g. app stores, marketplaces, etc.)

Innovation & User Experience

End user adoption and supplier onboarding are probably the #1 issue holding back ROI in S2P implementations (adoption = compliance = benefits).

• How do you think about reducing training complexity for end users while increasing the amount of data/insights available to procurement and supply chain?

We’ve seen network/portal integration methods multiply over time (portal, csv, EDI, cxml, etc.) but still there is resistance from suppliers to onboarding vendor networks.

• How do you make participation more frictionless for the suppliers (e.g. why are suppliers still phoning customers to reset passwords…)?

• How are your thinking about integrating AI/GenAI functionalities into your platforms? How are your making your models “Procurement Savvy”?

The Future of the ProcureTech Market

• What is your take on the proliferation of intake management and process orchestration solutions? Partners or competitors?

• Are there other ProcureTech solution categories impressing you at the moment? Why?

• How do you foresee the ProcureTech market in 5-10 years? What are S2P Suites’ role in it?

• Do you see a new generation suite coming out of the woodwork (e.g. built from scratch with GenAI at the core) and competing with you? Why?

Give them a spin at your next QBR and let me know how it goes 😉

Am I missing any questions? Let me know in the comments below 👇

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