My ProcureTech Market Map

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Hi readers,

I’m doing something risky… I may have had one too many Eggnogs…

(It is officially December after all 😅).

I’ve been obsessing over the “perfect” ProcureTech Market Map for over 10 years…

No… Not a slide full of logos…

Rather, a framework to help ANY BUSINESS bridge their procurement business processes with the technology available on the ProcureTech market.

Tall order, right?

It finally time to push this baby into the world and hope it survives… 🤞

Tonight’s note is one I’ve been wanting to write for years… I hope it delivers on the promise above. Let me know.

Onwards!

📰 In this week’s edition:

• 📋 5 procurement jobs that caught my eye

• 🏆 The Road to the ProcureTech Cup : Episode 14

• 🌙 My ProcureTech Market Map

Tap the poll at the bottom of this email after reading.
It helps me ensure I’ve not yet turned into a mad scientist…

Note: Some of the content above is only available in the email version of this newsletter. Don’t miss out! Sign up for free to get the next edition.

The Journey Continues…

Join me as Saas Rooms comes to the show to demo their SaaS Spend Management software.

Come see how they are helping companies save thousands on their SaaS spend:

Last Week’s Episode

Kodiak Hub demoed their end-to-end Supplier Relationship Management platform for strategic, sustainable, and smart procurement.

If you missed it, I’ve made ALL the replays available for you on YouTube:

What is the ProcureTech Cup? Start Here.

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My ProcureTech Market Map

There’s a problem with Procurement Software today… There’s too much of it!

Although this is a much better problem than the one we had 5-10 years ago (e.g. only having 12 providers to choose from…), it’s still a problem…

Procurement organizations are drowning in a sea of software.

That’s why I’ve said you should Stop Trying to Find “The Best” Procuretech Solution and have advocated for a Common ProcureTech Taxonomy. Existing market maps are just not cutting it…

Don’t get me wrong, market maps full of logos are great. They help build awareness of the ProcureTech market’s capabilities and that’s a win in my book.

However, these maps have left me wanting more… I want procurement professionals to have a useful, actionable tool that doesn’t just show you the leaders in a given corner of ProcureTech at a given time. The tool should give you an operating framework to both:

1. Navigate the ProcureTech Market in perpetuity

2. Build a ProcureTech roadmap in your company’s context

My view is that a good ProcureTech “Market Map” should give you a framework to bridge your organization’s objectives with what the market has to offer.

I want a framework that teaches you to fish instead of one that simply hands you fish…

I’ve been obsessing over this for over a decade… Tonight, I’m sharing the fruit of that labor with you.

So here it is…

If you watch The Road to the ProcureTech Cup (the weekly show designed to show procurement professionals the art of the possible with ProcureTech), the slide above will be familiar to you. I bring it up every week on the show (with a few small changes).

I have been perfecting it by putting it to the test with various providers. I want it to be a tool to help you understand how any vendor “fits into the whole” of the ProcureTech ecosystem.

Today, I’ll define every box in the model for you.

Regardless of whether or not you watch the show, this framework will be useful when you think about technology for your procurement function. The model sits at the intersection of your business processes and what procurement technology has to offer. Every business can and should have a position regarding each one of these boxes.

The framework may evolve a bit over time as the market itself develops new capabilities but, by and large, it should remain stable over time. That’s the advantage of this model vs typical market maps… I’m aiming for “zero blind spots.”

Study it once, understand Procurement software forever.

Let’s get into it:

(Download the image and put it up on a second screen if you want to follow along while reading)

1/ Strategic Sourcing (or Source-to-Contract) solutions

Tools catering to the Procurement function’s strategic responsibilities (Opportunity Mining, Category Management, Sourcing and contracting). These are the typical responsibilities and processes operated by Category Managers (in collaboration with other functions and stakeholders):

1. Spend Analysis and Demand Management
   Tools that help procurement analyze and visualize spend data to uncover savings/value opportunities, monitor compliance, forecast demand, etc.

   • Includes: Spend Analysis, Spend Radar, Spend Visibility, Demand Planning, Spend Data Cleansing & Enrichment, Procurement Analytics, etc.

2. Category Management
   Tools that support category strategy development through planning, market analysis, and supplier segmentation.

   • Includes: Category Workbench, Supplier Discovery, Market Intelligence, Purchasing Price Variance (PPV) analysis tools, “Should Cost” tools, Market data (indices), etc.

3. Procurement Project Management (combined with Cat. Man.)
   Tools track procurement project KPIs, milestones, allocate resources, and enhance collaboration with internal stakeholders. Projects originate via spend analysis and category management.

   • Includes: Procurement Performance Management, traditional “project management” software that may be repurposed, etc.

4. Sourcing
   Tools to streamline and automate procurement’s “go to market” activities (RFX creation, coordination, analysis and award).

   • Includes: Auction tools, sourcing optimization, complex sourcing scenario modeling, sourcing automation, etc.

5. Contract and Price List Management
   Tools to streamline and automate contract drafting (authoring), negotiation with vendors, approval workflows, and price list updates, ensuring compliance and visibility into negotiated terms.

   • Includes: Contract clause libraries, Contract repositories, Contract Lifecycle Management (CLM), eSignature, Contract Intelligence, Price Management, Obligation management, Dynamic price management, Catalog Management solutions, etc.

2/ Purchasing (or Procure-to-Pay) solutions

Tools to support the day-to-day logistics of getting goods and services into your business at the transaction level, from requirement to supplier payment.

1. Operational Purchasing (P2P)
   Tools to streamline day-to-day purchasing processes from requisition (need to purchase) through approvals, purchase orders, order confirmations, advanced shipment notices (ASN) to goods receipts (goods) and timesheet management (services). These can be different

   • Includes: Procure-to-Pay, Buying solutions, Contingent Workforce Management (CWM) solutions, etc.

2. Accounts Payable (AP)
   Tools to streamline and automate invoice receipt (“ingestion”), processing, matching, exception management and payment for both purchase order based and Non-Purchase order based invoices.

   • Includes: Optical Character Recognition (OCR), AP Automation, Invoice Management, Invoicing, Payables, etc.

3. Expense Management
   Tools to streamline employee expense booking, tracking and reporting while ensuring compliance. This also includes travel booking tools and payment cards (PCards). I’ve included all of these in “Accounts Payable” in the framework given they are all tools to manage and pay different categories of expenses.

   • Includes: Expense Management, Travel and Expense tools, PCard programs, etc.

3/ The “Coordination” Layer

At any point in time, employees in your company may need to interact with any of the processes/sub-processes listed above… This is a hard problem. How do make it easy for any given employee to get “connected” to any given process based on what they are trying to do, removing friction from users and their end goal? That’s where Intake and Orchestration come in…

1. Intake Management
   Tools that aim to “understand” user procurement intentions and requirements to direct them to the appropriate processes, systems and workflows, improving transparency and efficiency.

   • Includes: Guided Buying, “Smart Forms”, “Digital Front Doors”, Etc.

2. Process Orchestration
   Tools that coordinate the execution of end-to-end procurement processes by automating workflow execution, transitions between different systems and governance of the overall flow of tasks and actions. I lump in technical integration systems (middleware) here as well as they are rapidly becoming one and the same.

   • Includes: Process Execution Management System (EMS), Process Automation system, Process integration systems, Business Rules Management systems, Procurement Workflow systems, Business Process Management Suites, etc.

4/ Supplier Relationship Management Tools

Although theoretically part of the “strategic procurement” arsenal, I’ve put tools to help Category Managers stay on top of supplier relationships in a separate category because their breadth is much larger than just “relationship management”, as you’ll see below.

1. Supplier Relationship Management (SRM)
   Tools for streamlining and managing every type of interaction with supplier data (e.g. both internal or external data). Supplier data feeds back into Spend Analysis to complete the loop (as spend data without supplier data is fairly worthless…).

   Includes: Supplier Segmentation, Supplier Hierarchies, Supplier Qualification, Vendor Vetting, Supplier Data Management, External supplier data sources, “Supplier Watch”, Third-Part Risk Management, Media Monitoring, Supplier Insights, Supplier Performance Management, Supplier Lifecycle Management, Etc.

   1. Onboarding
      Tools that support onboarding streamline the process of registering new suppliers, collecting necessary documentation, data and ensuring compliance with company policies. They enable rapid supplier setup while reducing administrative effort and minimizing onboarding delays.

   2. Classification
      Tools that support classification help categorize suppliers based on criteria such as spend volume, strategic importance, industry, geography or product/service type provided to your business. This segmentation helps procurement prioritize relationships, determine what qualification requirements are necessary and tailor engagement strategies effectively.

   3. Qualification
      Tools that support qualification help assess supplier capabilities, certifications, and alignment with business requirements before they are fully approved for procurement activities. Similar to onboarding, qualification tools ensure only reliable, compliant suppliers are integrated into the supply chain but consider the classification before executing data gathering (e.g. you wont ask for CVs from a goods supplier).

   4. Data Management (Or Supplier Master Data Governance)
      Tools that support supplier data management help maintain a centralized and accurate repository of supplier information, including contact details, financial data, and compliance documents. They support data integrity with multiple backend systems and streamline updates to ensure accurate reporting and analysis across your procurement system ecosystem.

   5. Supplier Risk Management (Or Third-Party Risk Management)
      Tools that support risk management onboard and monitor suppliers for financial, operational, geopolitical, and compliance risks using supplier provided data, internal assessments and real-time, publicly available data. They enable proactive risk mitigation strategies to protect the supply chain from disruptions.

   6. Performance Management
      Tools that support performance management help track and evaluate supplier performance against both tangible and intangible KPIs, such as delivery reliability, quality standards, client satisfaction and cost. These insights help procurement drive continuous improvement and strengthen supplier partnerships with things like action plans. This can also feed into Procurement Project Management.

   7. Offboarding
      Tools that support offboarding help handle the secure and efficient removal of suppliers from procurement systems, ensuring the closure of outstanding transactions and the return of company-owned assets. They maintain compliance and mitigate risks when supplier relationships end.

5/ Other

There are a few other process/system categories… They are just rarely front and center when it comes to ProcureTech because they tend to be “cross-functional” (used by many functions in the business). I don’t have them in the graphic but will list them here for completeness’ sake:

1. Other Procurement Master Data Management solutions

   Whether its for materials, services, catalog items, contracts, etc., you may need additional solutions to help with master data management other than suppliers if not fully enabled by tools in the above categories.

2. Procurement Technology Management

   Tools to help monitor and optimize your portfolio of digital procurement technologies. This usually falls to IT, who monitors applications for all functions. However, increasingly, digitally savvy functions will want to be involved in these discussions (and therefore tools) directly.

3. Procurement People Management

   Tools used to managing skills, training, career development, and performance of procurement teams (and aligning them with organizational goals) are typically enterprise-wide HR systems used by all functions and business units. However, developing procurement skills is not the same as developing skills in another function. As we get more sophisticated here, enterprise-wide solutions will need to play nice with function-specific solutions in this space.

4. Procurement Governance Tools

   Tools that ensure compliance with policies, regulations, and best practices in procurement. This usually takes the form of Enterprise Risk Management Systems (ERMS) and covers the whole enterprise. However, just like people management, managing risks in procurement is different than in other functions. A “suite vs. best-of-breed” discussion is always warranted here too.

So there you have it… Based on my Procurement Function Value Chain, I hope this framework gives you a stable “lens” through which you can view the procurement technology market. Technology and business process go together. That’s the guiding principle behind this framework.

You should study and use it for 2 main use cases:

1. Building your technology roadmap. What is your company’s position as it relates to every category above? It can certainly be that you don’t need any technology for a given piece but at least it’s a conscious choice which is part of global vision/strategy.

2. Understanding what ANY ProcureTech Vendor does very quickly… When you meet a new software vendor, ask them how they position themselves on this map. You’ll very quickly get a sense of what they can and can’t do. You’ll also very quickly know how this fits (or doesn’t fit) into your technology roadmap.

By adopting the Pure Procurement ProcureTech Market Map, you’ll become a much more mature digital procurement organization. Overnight. I promise.

Did I forget anything? Let me know in the comments 👇

P.S. If you want to go deeper down the rabbit hole, check out my ProcureTech Taxonomy (v1). I’ve attempted to catalog every ProcureTech sub-category, one level down from this framework (Yup… Turning into a mad scientist…👨‍🔬).

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