Vendor Landscapes: eProcurement, eSourcing, eInvoicing, And...

Vendor Landscapes: eProcurement, eSourcing, eInvoicing, And Spend Analysis, 2016 To 2017Best-Of-Breed Solutions Provide Real Value To Improve Your Purchasing

by Andrew BartelsMarch 23, 2017

For CIos

fORReSTeR.cOm

Key TakeawaysSaaS Has Become The Dominant Deployment model for Best-Of-Breed ProductsDemand is growing for eProcurement, esourcing, eInvoicing, and spending analysis, with 2016 and 2017 growth shifting into double digits. software-as-a-service (saas) is the most common deployment model in esourcing and spend analysis, and a similar trend is developing in eProcurement and eInvoicing.

Specialists Offer Strong Usability, functions, And Industry Or Geographic KnowledgeIn each category, there are two to four types of vendors, including one or more types of suite. But specialists can offer best-of-breed solutions that are easy to use, feature sophisticated functions, and can be adapted to specific industries, countries, or regions — something that suite vendors can’t match.

New entrants Innovate And Push existing Vendors To match Their Pace Of InventionInnovation continues to affect all four ePurchasing categories, with new vendors shaking up each category with new features and functions, especially around usability. This is pushing existing vendors to further improve, creating a wealth of options for CIos and their business partners.

Why read This reportePurchasing products are critical for helping businesses and governments source, buy, and manage the goods and services they use to win, serve, and retain customers. Firms can buy these products as part of integrated suites or standalone products. A recent Forrester report reviewed the landscape of ePurchasing suite vendors. This report is focused on helping CIos understand the value of standalone solutions and the vendor landscape that exists for individual products in the ePurchasing space, including eProcurement, esourcing, eInvoicing, and spend analysis.

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© 2017 Forrester research, Inc. opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, Techradar, and Total Economic Impact are trademarks of Forrester research, Inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378

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Table of Contents

ePurchasing Products Deliver Real Value In The Age Of The Customer

In eProcurement, SaaS Providers Are Replacing ERP Vendors

New Entrants Shake Up The Mature eSourcing Category

Accounts Payable eInvoicing Growth Stimulates AR eInvoicing

Spend Analysis Steams Ahead

recommendations

Best-Of-Breed Solutions Need To Be Fit For Purpose

Supplemental Material

Notes & resources

In the past 18 months, Forrester has received vendor briefings from more than 60 companies that provide ePurchasing products.

related research Documents

Vendor Landscape: B2B Business Networks

Vendor Landscape: services Procurement In 2016 And Beyond

Vendor Landscape: supplier risk And Performance Management

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Vendor Landscapes: eProcurement, eSourcing, eInvoicing, And Spend Analysis, 2016 To 2017Best-Of-Breed Solutions Provide Real Value To Improve Your Purchasing

by Andrew Bartelswith Matthew Guarini, Duncan Jones, robert Valdovinos, and Ian McPherson

March 23, 2017

http://www.forrester.com/go?objectid=RES119694





http://www.forrester.com/go?objectid=BIO728



For CIos

Vendor Landscapes: eProcurement, eSourcing, eInvoicing, And Spend Analysis, 2016 To 2017March 23, 2017

© 2017 Forrester research, Inc. Unauthorized copying or distributing is a violation of copyright law. [email protected] or +1 866-367-7378

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Best-Of-Breed Solutions Provide Real Value To Improve Your Purchasing

ePurchasing Products Deliver real Value In The Age of The Customer

success in the age of the customer requires a focus on the technologies, systems, and processes for winning, serving, and retaining customers. supporting this approach are critical back-office processes for acquiring the goods and services necessary to support the customer value proposition. ePurchasing is Forrester’s term for the software products designed to help improve all the stages of the buying process These products help CIos and their business colleagues get the most value for their purchased goods and services. recent Forrester reports have covered ePurchasing suites, services procurement, supplier risk and performance management, business networks, and contract life-cycle management. In this report, we cover the key trends and leading vendors in the remaining standalone ePurchasing products: eProcurement, eInvoicing, esourcing, and spend analysis (see Figure 1).

fIGURe 1 eProcurement, esourcing, eInvoicing, And spend Analysis support Key Parts of The Buying Process

8. Suppliernetwork services

6. Servicesprocurement

1. Spend analysis3. eSourcing

5. eProcurement

7. eInvoicing

2. Supplier riskand performance

management

4. Contractlife-cycle

management

Standalone Solutions Still matter

While many firms are acquiring their ePurchasing products as part of suites, there is still demand for best-of-breed eProcurement, esourcing, eInvoicing, and spend analysis products for three reasons:

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› Stakeholders beyond the cPO may have their own requirements. The CPo is generally the key decision maker and the main advocate for an eProcurement system. However, CFos may want products that support compliance with spending policies and help accounts payable processes, while the head of product development may advocate for an esourcing tool that links to the product life-cycle management solution.

› Specialist vendors can offer distinctive features that suites lack. ePurchasing suite vendors tend to emphasize compatibility and common look-and-feel across their suites, not necessarily best-in-class functionality. specialist vendors design their products for specific industries, advanced techniques for more complex activities, integration with document capture technologies, or linkages to other solutions.

› firms may simply replace existing products on a like-for-like basis. Many existing eProcurement, esourcing, and eInvoicing products are licensed, on-premises products that are aging. Existing clients are starting to look at replacing these specific products with a similar product. In these cases, players will substitute new-for-old in the same category.

In eProcurement, saas Providers Are replacing ErP Vendors

eProcurement has been the starting point for the vast majority of firms that look for software products to improve their purchasing activities. eProcurement products help employees acquire the goods they need for their daily activities in meeting the needs of customers. We define these products as performing the following functions:

eProcurement: Employee requisitioning of products, manager approval work-flow, employee-facing catalog, purchase order delivery to suppliers, punch-out to suppliers for order placement, and catalog management tools.

SaaS Is capturing Share Through Better Usability And Higher Savings

Firms that want an eProcurement system have three main options: 1) ErP vendors’ offerings; 2) specialist ePurchasing vendors; and 3) vertical or geographic eProcurement vendors. Each of these options has their own strengths and weaknesses and exhibit different trends in terms of their share of the eProcurement market.

› eRP dominance of eProcurement meant license and maintenance fees prevailed. For many years, eProcurement products were primarily sold as attachments to the ErP system — often at heavily discounted prices. But these products were often expensive to deploy and hard to use, leading existing clients and new prospects to shift to saas subscription models. As a result, license and maintenance revenues will shrink to 44% of the market, though their expansion into saas means that the ErP vendors’ share will be 62% in 2017, still down from 73% in 2013 (see Figure 2-1 and see Figure 2-2).

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› Specialist eProcurement vendors used SaaS to enter the market. In the early 2010s, a new generation of vendors took on the ErP vendors with products that are easy for employees to use, which in turn, drives increased usage and higher realized savings. As a result, since 2012, all of the growth in eProcurement came from saas products, and saas subscriptions will equal 38% of all revenues by 2018 — up from 18% in 2012.

› Regional or industry specialists have defensible niches. some of these vendors focus on specific geographies like the Nordics (Basware and Capgemini IBX, recently acquired by Tradeshift), Benelux countries (Esize), or Brazil (Mercado Electronico). others like Birchstreet, Fourth, Exostar, GHX, and JAGGAEr (formerly sciQuest) offer solutions designed for specific industries. Mercado Eletronico provides eProcurement solutions linked to a supplier network in Brazil, other Latin American countries, and Portugal and spain. These vendors’ share of the market will rise to 14% in 2017 (see Figure 2-3).

fIGURe 2 saas starts To Take over eProcurement software

eProcurement software revenues by type of revenue(US$ millions)

LicenseMaintenanceSaaS subscriptionsSingle-instance hostedsubscriptionServices

License

Maintenance

SaaS subscriptions

Single-instance hostedsubscriptions

Services

Total eProcurement market

Percentage change fromprior year

2012to 2017CAGR

*Forrester forecast

2013 2014 2015 2016 2017*

$1,369

3%

$366

$408

$291$10

$294

$1,375$351

$420

$315$12

$277

$1,396

$326

$392

$385

$14

$279

$1,512

$316

$388

$483

$32

$292

$1,657

$328

$391

$585

$41

$312

-1% -4% -7% -3% 4% -2%

1% 3% -7% -1% 1% -1%

22% 8% 22% 25% 21% 20%

18% 18% 18% 126% 27% 36%

-4% -6% 1% 5% 7% 0%

0% 1% 8% 10% 5%

SaaS subscriptions rise, while license fees fall for eProcurement software2-1

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fIGURe 2 saas starts To Take over eProcurement software (Cont.)

eProcurement software revenues by type of vendor(percent of total eProcurement revenues)

ERP vendors’eProcurement products

SaaS eProcurementvendorsGeographic or industryeProcurement vendors

*Forrester forecast

2013 2014 2015 2016 2017*

100%

73%

19%

8%

100%

71%

20%

9%

100%

67%

22%

11%

100%

64%

23%

12%

100%62%

25%

14%

Coupa and other SaaS vendors are making inroads2-2

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Profiling the 20 largest eProcurement vendors by 2016 product revenue2-3

Rankingby 2016product

revenuesVendor

1

2

3

4

5

6

7

8

9

Number ofeProcurement

clients,mid-2016

5,400

3,700

1,000

680

200

340

100

770

600

Type of vendor

ERP

ERP

SaaS eProcurement vendor

ERP





SaaSeProcurement vendor

Deploymentmodels

SaaS for Ariba; licensed on-premises or single-instance hosted for SAP

SaaS for Oracle Procurement Cloud; licensed on-premises or single-instance hosted for other Oracle

SaaS

SaaS; licensed on-premises or single-instance hosted

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus

All industries, all geographies




Higher education, life sciences, health care, government, commercial, all geographies

All industries, Europe and US


All industries, the US


SAP Ariba

Oracle

Coupa

Infor

JAGGAER (formerly SciQuest)

Capgemini IBX (acquired by Tradeshift)

Tradeshift

ePlus

Basware

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Profiling the 20 largest eProcurement vendors by 2016 product revenue (cont.)2-3


revenuesVendor

10

11

12

13

14

15

16

17

18

19

20

Number ofeProcurement

clients,mid-2016

2,150

250

100

110

150

70

70

230

750

200

175

Type of vendor

Industry eProcurement vendor







Industry eProcurement vendor


Geographic eProcurement vendor


Deploymentmodels

SaaS

SaaS

SaaS; licensed on-premises or single instance hosted

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus

Hospitality industries, US and Europe


All industries, UK


All industries, US and Europe

All industries, US

All industries, US

Hospitality industries, US and Europe

All industries, UK and US

All industries, Brazil, Latin America, Spain, Portugal


Fourth

Perfect Commerce

Wax Digital

GEP

Ivalua

Workday

Apttus

BirchStreet

Proactis

Mercado Electronico

Determine

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SaaS Vendors Are challenging Oracle And SAP Ariba’s Position

Firms looking for an eProcurement solution can choose from about two dozen vendors, divided up among the three major vendor categories:

› Infor, Oracle, and SAP remain the largest eProcurement vendors. History matters. There are thousands of companies that have existing licensed eProcurement products from Infor, oracle, and sAP. They are also attractive in emerging markets where saas solutions struggle. These vendors’ licensed client bases are vulnerable to replacement, so all three vendors are emphasizing their saas offerings and making major investments in improving their user interface and usability.

› coupa and other SaaS vendors ride the rising SaaS tide. saas vendors like Coupa, Ariba (now part of sAP), and Basware were rated as leaders in the The Forrester Wave™: eProcurement, Q2 2014.1 other vendors like BuyerQuest, Determine, GEP, Perfect, Proactis, JAGGAEr, Tradeshift (now including Capgemini IBX), Wax Digital, and Zycus offer saas eProcurement products with similar functionality and comparable usability. Companies like Workday, Apttus, and Cobblestone are linking their saas eProcurement products to their financial management or CLM solutions. Edgeverve, an Infosys subsidiary, has a new product with bots for automating specific procurement tasks. Ivalua and Wax Digital provide subscription-priced, single-instance options for firms that want to have their own customizable instance of eProcurement, but with subscription pricing and the vendor’s management of the application.

› BirchStreet, fourth, exostar, GHX, and JAGGAeR target specific industries. some industries have special procurement needs, which drives specialized solutions. Birchstreet and Fourth provide specialist eProcurement solutions for the hospitality industry. Exostar supports the high-security purchasing requirements of aerospace and defense firms. GHX provides an eProcurement solution for hospitals linked to the GHX supplier network. For higher education and pharmaceutical firms, JAGGAEr offers a chemical inventory management module.

New Entrants shake Up The Mature esourcing Category

esourcing tools help firms conduct more effective strategic sourcing. sourcing is the process of choosing the suppliers of and setting the prices for the direct materials that go into the goods that manufacturers, wholesalers, and retailers sell to customers, as well as for the indirect goods and services that all firms use to support customer-oriented activities. We define esourcing products as supporting the following functions:

eSourcing: collaborative drafting of an RFx (e.g., RFI, RFP, FQ), with support for vendor questions and responses posted individually or to all suppliers; side-by-side comparisons of vendor responses, with collaborative scoring; reverse auctions environment; and sourcing team project management and overall sourcing portfolio management.

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Demand for eSourcing Tools Awakens from Its Slumber

Growth in spending on esourcing products has been variable since 2012. Looking forward, that dynamic is set to change. 2016 will see growth approaching 7%, with acceleration to 10% growth in 2017. Trends leading to this change include:

› Lack of innovation in eSourcing stifled demand. Until the past year or so, one esourcing product looked like every other, with similar functionality aimed at sourcing professionals. As a result, price points for esourcing solutions eroded, while demand was confined to larger firms with their own sourcing staff.

› SaaS dominates eSourcing, but by itself does not outweigh aging products. saas subscriptions will exceed combined license and maintenance by almost two to one by 2017. But the stagnation of esourcing functionality meant that saas subscriptions for esourcing rose at less than 10% rates in 2013 and 2014 — and actually fell in 2015 (see Figure 3). single-instance hosted revenues rose during this period, as some clients opted for the perceived security of solutions they could control and customize, but they remained a small part of the overall esourcing market.

› Innovations in usability are causing eSourcing growth to pick up. While the primary users of esourcing products have been sourcing and vendor management (sVM) professionals, the real potential for esourcing lies with adoption by line-of-business executives. scout rFP is starting to change the dynamics in esourcing, with its differentiation on usability, which has helped it acquire over 90 customers in less than two years, especially in high-tech (e.g., Adobe and Cerner) and professional services (e.g., KPMG and McKinsey). scout rFP’s success is forcing other esourcing vendors to rethink their usability.

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fIGURe 3 New Vendors Disrupt The Vendor Landscape For esourcing software

eSourcing software revenues by type of revenue(US$ millions)


License

Maintenance

SaaS subscriptions


Services

Total eSourcing market

Percentage changefrom prior year

2012to 2017CAGR

*Forrester forecast

2013 2014 2015 2016 2017*

$978

4%

$179$182

$366$20

$231

$1,016

$171$191

$390

$22

$241

$1,009

$161$180

$381$27

$260

$1,085

$160$183

$434

$40

$267

$1,206

$168$190

$519

$50

$280

3% -4% -6% -1% 5% -1%

7% 5% -6% 2% 4% 2%

6% 7% -2% 14% 19% 8%

11% 11% 19% 50% 24% 22%

0% 4% 8% 3% 5% 4%

4% -1% 8% 11% 5%

eSourcing software revenue growth will rise by 10% in 2017, with SaaS dominating3-1

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fIGURe 3 New Vendors Disrupt The Vendor Landscape For esourcing software (Cont.)

eSourcing software revenues by type of vendor(percent of total eProcurement revenues)

ERP vendors’eSourcing products

SVM suites with eSourcingGeographic or industryeSourcing vendors

*Forrester forecast

2013 2014 2015 2016 2017*

100%

48%

20%

32%

100%

47%

21%

33%

100%

44%

21%

35%

100%

41%

23%

36%

100%

39%

23%

37%

SVM suites and industry or geographic specialists expand their market share3-2

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Pro�ling the 15 largest eSourcing vendors by 2016 product revenue3-3


revenuesVendor

1

2

3

4

5

6

7

8

9

Number ofeSourcing

clients,mid-2016

1,100

560

500

250

80

230

150

220

150

Type of vendor

ERP

ERP

SVM suites with eSourcing


Industry eSourcing vendor



Geographic eSourcing vendor


Deploymentmodels


SaaS for Oracle Procurement Cloud; licensed on-premises or single-instance hosted for other Oracle


Licensed on-premises or single-instance hosted

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus



All industries; France, Italy, Middle East, Spain, the US, the UK


Retail and CPG, all geographies




All industries, Scandinavia and northern Europe

SAP Ariba

Oracle

BravoSolution

IBM Emptoris

NeoGrid

GEP

Perfect Commerce

I-Faber

Capgemini IBX (acquired by Tradeshift)

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Profiling the 15 largest eSourcing vendors by 2016 product revenue (cont.)3-3


revenuesVendor

10

11

12

13

14

15

16

17

18

19

20

Number ofeSourcing

clients,mid-2016

1,200

120

280

140

350

175

2,100

20

450

230

120

Type of vendor












Deploymentmodels

SaaS

SaaS

SaaS

SaaS

SaaS

Single-instance hosted

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus

Government, US


All industries; Europe and US

Higher education, life sciences, health care, government, commercial, Europe and US



All industries, Portugal, Spain, Germany, Austria, Colombia, and Domincan Republic

Aerospace and pharmaceuticals, US and UK

All industries, US and UK

Manufacturing, Germany and US

All industries, UK

Periscope Holdings

Zycus

SynerTrade

JAGGAER

Scanmarket

iValua

Vortal

Exostar

Proactis

Pool4Tools

Wax Digital

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New Vendors Bring New Approaches To eSourcing

The esourcing market has three main categories of vendors, with different value propositions for potential clients: 1) ErP vendors that offer esourcing products as part of their suites; 2) sVM suite vendors that include esourcing as a module in their suite; and 3) industry and geographic specialists.

› eRP vendors command the largest (but shrinking) share of the eSourcing market. With esourcing often offered along with eProcurement to their ErP clients, these vendors captured two-fifths of the esourcing market. recent upgrades in the user interface of oracle, Peoplesoft, and sAP core esourcing products will keep them relevant in the market, but they lack differentiation outside the oracle and sAP client bases. Their saas products in the oracle Cloud Procurement suite and Ariba suite are more attractive.

› SaaS eSourcing specialists with SVm suites expand their share. saas vendors that offer sVM suites like Bravosolution. GEP, Pool4Tool, and Zycus bundle esourcing with other products used by sVM professionals. similar sVM vendors like IBM Emptoris and Ivalua provide single-instance hosted products with subscription pricing. The combination of esourcing with related applications and greater ease-of-use of saas apps have proved very attractive to sVM teams, and the example of scout rFP will push them to extend their usability to business users. In addition, vendors like Keelvar, JAGGAEr’s Advanced sourcing optimizer, and Trade Extensions help firms handle complex sourcing for telecom services, shipping and logistics services, and commodities.

› Industry or geography eSourcing specialists also increase their market share. A key success factor in esourcing efforts is an intimate understanding of the sourcing challenges and opportunities that customers face. This gives an edge to industry-focused (e.g., NeoGrid in retail, Elemica in chemicals, and Exostar in aerospace) and regional offerings (e.g., i-Faber in Italy; Vortal in Portugal, Austria, Germany, spain, and Latin America; and Mercado Electronico in Brazil and Latin America).

Accounts Payable eInvoicing Growth stimulates Ar eInvoicing

In B2B commerce where delivery of goods and services often occurs weeks before payment, invoices play a key role in linking delivery and payment. Accounts payable (AP) eInvoicing helps buyers cut the cost and cycle time of processing and validating invoices for payment, enabling earlier and more accurate payment to suppliers. Accounts receivable (Ar) eInvoicing helps suppliers interact with their customers who want to receive electronic invoices. We define these products as having the following functions:

AP eInvoicing: Capture of electronic invoice data; automated matching of invoice with PO, contract, and receipt; workflow to approve unmatched invoices; cash forecasting, discount management, and financing; support for dynamic discounting.

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AR eInvoicing: presentment of electronic invoices to customers; tracking the status of presented invoices; receiving advance payment notices; support for dynamic discounting.

AP eInvoicing can help firms reduce the cost and cycle time of processing and validating invoices. Ar eInvoicing allows suppliers not only to generate electronic invoices but also to track their status and automatically respond to advanced payment notices from buyers, which would allow them to offer dynamic discounting at scale.

The Shift Of AP eInvoicing Toward SaaS Reaches A Tipping Point

Licensed software has historically captured a large part of the AP eInvoicing market. However, existing vendors have shifted to saas solutions while others have converted to subscription-priced single-instance hosted models to meet the competition from saas vendors. This transition means that saas revenues are twice as large as combined license and maintenance revenues. The shift to the two forms of subscriptions is now far enough along that total AP eInvoicing purchases will grow at double-digit rates in 2016 and 2017 (see Figure 4-1). While Ar eInvoicing is still less widely adopted than AP eInvoicing, revenues from these solutions are growing as suppliers find more of their customers are using AP eInvoicing. These solutions are primarily saas (see Figure 4-2).

Specialists focusing On end Users Lead eInvoicing

oracle and sAP Ariba have been relatively small players in AP eInvoicing compared to their position in other ePurchasing products. Today, they offer eInvoicing as complements to their eProcurement products in P2P suites. A second approach to this market is vendors that specialize in eInvoicing, a group that continues to have the largest share of this market. A third approach is vendors that combine eInvoicing (invoice matching, approval workflow, and analytics) with document scan-and-capture systems for handling paper invoices and other documents (see Figure 4-3).

› P2P suite vendors combine eInvoicing with eProcurement. Many vendors that offer eProcurement products have added eInvoicing modules over the years, including Ariba, Birchstreet, Coupa, GEP, Ivalua, oracle (Cloud Procurement, eBusiness suite, and Peoplesoft), Perfect Commerce, Proactis, Tradeshift, Xeeva, and Zycus. These products appeal to firms with strong CPos and passive AP departments, which are willing to follow the lead of whatever the CPo chooses.

› Specialist AP eInvoicing vendors still dominate. Basware, Bottomline Technologies, Chrome river, Paybox (formerly Direct Insite), Fundtech’s Accountis, Gimmal, and Taulia started with and in most cases, have stayed focused on AP eInvoicing (the exceptions are Basware, which expanded into eProcurement, and Gimmal, which also offers CLM). Their sales have mostly been to CFos and the AP department.

› Scan-and-capture vendors hold their share. The vast majority of suppliers still mail paper invoices to their customers. This provided the opportunity for vendors like Esker, ITEsoFT, Kofak, and openText to use their multichannel capture technologies to help firms scan these paper

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invoices and convert the resulting images into electronic data for automated matching, approval workflow, and analysis. These systems are appealing to firms in insurance, financial services, and government, which must handle high volumes of paper applications.

› AR eInvoicing vendors start to gain in regions with high AP eInvoicing adoption. We are reaching an inflection point in which sellers can start to assume that enterprise clients that receive eInvoices will want to have an Ar eInvoicing solution. As a result, spending on Ar eInvoicing solution is starting to gain on purchases of AP eInvoicing (see Figure 4-4). opusCapita in scandinavia, PAYBoX in the Us, Billtrust and VersaPay in Canada and the Us, and Esker in Europe and the Us are the most prominent Ar eInvoicing vendors at this time (see Figure 4-5).

fIGURe 4 Three Types of eInvoicing Vendors Battle It out For Leadership

eInvoicing revenues by type of revenue(US$ millions)


License

Maintenance

SaaS subscriptions


Services

Total AP eInvoicing market


2012to 2017CAGR

*Forrester forecast

2013 2014 2015 2016 2017*

$673

4%

$85

$148$298

$55

$708 $85

$152$266

$65

$87 $141

$728 $78

$133$299

$83

$136

$756 $72

$126$332

$91

$136

$846 $74

$139$384

$107$142

-8% 0% -8% -8% 3% -4%

6% 3% -13% -5% 11% 0%

10% -11% 12% 11% 16% 7%

18% 18% 27% 10% 17% 18%

-13% 61% -3% 0% 5% 7%

5% 3% 4% 12% 7%

The SaaS takeover of AP eInvoicing software reaches a tipping point4-1

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fIGURe 4 Three Types of eInvoicing Vendors Battle It out For Leadership (Cont.)

AR eInvoicing solutions are a small but growing part of the market4-2

Revenues by eInvoicing product(US$ millions)

AP eInvoicingAR eInvoicing

AP eInvoicing

AR eInvoicing


2012to 2017CAGR

2013 2014 2015 2016 2017*

4% 5% 3% 4% 12% 5%

17% 42% 15% 11% 11% 19%

$673

$62

$708

$88

$728

$102

$756

$112

$846

$124

AP eInvoicing specialists continue to hold their market share4-3

AP eInvoicing software revenues by type of vendor(percent of total AP eInvoicing revenues)

eInvoicing specialistsP2P suite vendorsBanksScan and capture vendors

*Forrester forecast

2013 2014 2015 2016 2017*

100%

42%

22%

9%27%

44%

23%

8%25%

43%

23%

7%27%

43%

25%

6%27%

44%

26%

5%25%

100% 100% 100% 100%

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Profiling the 15 largest AP eInvoicing vendors by 2016 product revenue4-4


revenuesVendor

1

2

3

4

5

6

7

8

9

10

11

Number ofAP eInvoicing

clients,mid-2016

3,400

500

2,600

140

170

1,000

660

100

300

300

90

Type of vendor

Scan and capture vendor

ERP

eInvoicing specialist



ERP

P2P suite vendor


Bank


P2P suite vendor

Deploymentmodels



SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus




Oil & gas industries, Canada and US


Manufacturing and retail, US and Europe



Transportation, US



Kofax

SAP Ariba

Basware

OilDex

Bottomline Techno-logies

Infor

Coupa

Taulia

U.S. Bank Freight Payment (formerly Syncada)

Chrome River

Tradeshift

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19



Profiling the 15 largest AP eInvoicing vendors by 2016 product revenue (cont.)4-4


revenuesVendor

12

13

14

15

Number ofAP eInvoicing

clients,mid-2016

140

300

100

200

Type of vendor



ERP


Deploymentmodels

SaaS

SaaS

SaaS

Licensed on-premises or single-instance hosted

Client focus




All industries, Europe

Gimmal

Esker

Oracle

ITESOFT

The top AR eInvoicing vendors4-5


revenuesVendor

1

2

3

4

5

8,000

1,600

20

150

90

Number ofAR eInvoicing

clients,mid-2016

Deploymentmodels

SaaS; licensed on-premises or single-instance hosted SaaS

SaaS

SaaS

SaaS

Client focus

All industries, Scandinavia

All industries, US and Canada

All industries, US


All industries, US and Canada

Opus Capita

Billtrust

PAYBOX (formerly Direct Insite)

Esker

VersaPay

For CIos



20


spend Analysis steams Ahead

Automated spend analysis helps firms identify sourcing opportunities and find the sources and causes of contract leakage. Insight into a firm’s spending helps it make sure that its purchases of goods and services will enable it to meet its objectives for winning, serving, and retaining customers. our definition of these products includes the following functions:

Spend analysis: loading of spend data from multiple sources; cleansing and normalizing of spend data; classification into spend categories; reports and analysis to identify savings opportunities and sources of contract leakage.

spend analysis tools are most valuable for large, diversified, global firms that may have multiple divisions with different ErPs. But they can also be useful for midsize firms with a single ErP that want more granular information on their corporate spending than comes out of their general ledger system.

High SaaS Adoption Helps Drive Strong Revenue Growth

Almost from the beginning, spend analysis products have been sold primarily on a subscription basis, either as multitenant saas or single-instance hosted. subscription pricing allows firms to start small then expand to more frequent or wider spend analysis as they can act on the results. While overall revenues measured in Us dollars dipped in 2015, the decrease was mostly due to the strong dollar. otherwise, expanding adoption both in number of clients and in client usage has kept category revenues growing at double-digit rates, reaching $454 million in 2017 (see Figure 5-1).

Spend Analysis/eSourcing combos Are The most common Offering

spend analysis solutions are generally packaged with esourcing. That makes sense because the primary use of spend analysis is to identify sizable categories where firms can capture significant savings by consolidating that spend with the supplier that will offer the biggest discount. But spend analysis requires some unique skills, and that leaves room for specialist vendors. As a result, there are two categories of spend analysis vendors (see Figure 5-2):

› combined eSourcing/spend solutions have the largest share. Having a large client base and a long history of spend analysis is a competitive advantage, as it provides vendors and their clients with a rich knowledge base to inform the classification of spend. sAP Ariba, IBM Emptoris, Bravosolution, GEP, and Zycus offer spend analysis/esourcing products. When combined, these suite vendors have about 90% of the revenues for this area (see Figure 5-3).

› Specialized products add analytics or compliance to create value. some clients are looking for solutions that add additional value. Vendors like opera solutions and rosslyn Analytics combine spend analysis with other analytical applications. others like sievo provide a twist by selling their solution to the CFo as a means for tracking contract compliance and sourcing results. spend360 (recently acquired by Coupa) and spendHQ promise very high accuracy in their spend classification engines through recursive neural networks and the addition of human expert review, respectively.

For CIos



21


fIGURe 5 sVM suite Vendors Dominate spend Analysis, But specialists still Have A role

Automated spend analysis software revenues by type of revenue(US$ millions)


License

Maintenance

SaaS subscriptions


Services

Total spend analysis market


2012to 2017CAGR

*Forrester forecast

2013 2014 2015 2016 2017*

5%

$288

$141

$35$39

$13

$59

$323

$161

$37$38

$16

$71

$333

$155

$34$36

$21

$85

$382

$196

$36$37

$23

$90

$454

$250

$38$39

$28

$100

-1% -3% -5% 1% 7% 0%

-2% 6% -6% 4% 6% 1%

9% 14% -4% 26% 27% 14%

18% 18% 35% 7% 21% 19%

5% 20% 20% 6% 11% 12%

12% 3% 15% 19% 11%

Automated spend analysis software returns to strong growth5-1

Automated spend analysis specialist versus suite vendor(percentage of total spend analysis vendor revenues)

Spend analysis specialistsSVM suites

2013 2014 2015 2016 2017*

100%10%

90%

100%10%

90%

100%11%

89%

100%11%

89%

100%11%

89%

SVM suite vendors hold a 89% share of the spend analysis market5-2

For CIos



22


fIGURe 5 sVM suite Vendors Dominate spend Analysis, But specialists still Have A role (Cont.)

Profiling the 14 largest spend analysis vendors by 2016 product revenue5-3


revenuesVendor

1

2

3

4

5

6

7

8

Number ofspend analysis

clients,mid-2016

550

200

200

300

350

400

70

120

Sourcing andvendormanagementsuites

SVM suites

SVM suites

SVM suites

SVM suites

SVM suites

Spend analysis specialist



Deploymentmodels

SaaS for Ariba; licensed on-premises or single-instancehosted for SAP



SaaS

SaaS

SaaS

SaaS

SaaS

Client focus






All industries, UK and US

All industries, Scandinavia


SAP Ariba

IBM Emptoris

BravoSolution

Zycus

GEP

Rosslyn Analytics

Sievo

Opera Solutions

For CIos



23


fIGURe 5 sVM suite Vendors Dominate spend Analysis, But specialists still Have A role (Cont.)

Pro�ling the 14 largest spend analysis vendors by 2016 product revenue (cont.)5-3


revenuesVendor

9

10

11

12

13

14

Number ofspend analysis

clients,mid-2016

60

75

160

160

100

100

Sourcing andvendormanagementsuites

SVM suites


SVM suites


SVM suites

SVM suites

Deploymentmodels

SaaS

SaaS

SaaS

SaaS

SaaS

Client focus


All industries, US


Manufacturing and �nancial services, UK and US



JAGGAER

SpendHQ

SynerTrade

Coupa (Spend360)

Oracle

Ivalua

Recommendations

Best-of-Breed solutions Need To Be Fit For Purpose

ePurchasing suites have many advantages, including a common look and feel across all the modules in the suite, data and activity integration between suite modules, and potentially lower costs. But there are many circumstances in which standalone products are the right choice. CIos who are looking to implement the right solution for the organization should keep these guidelines in mind:

› Get stakeholders aligned on the decision of standalone versus suite. CFos, CIos, or the head of AP may have their own requirement that will cause them to prefer a specialist eInvoicing solution over a suite. or there may be certain capabilities or specialist knowledge — industry or geographical — that drive significant value. Get the key stakeholders involved in the purchasing decision to ensure that you have the right buy-in.

For CIos



24


› Opt for SaaS solutions that increase usability and savings. CIos should look for eProcurement solutions that make it easy for employees to make the routine purchases of indirect materials that they need for their work. over the past few years, saas vendors have devoted more attention to usability, and they still tend to have products that ordinary business users will embrace more readily than traditional licensed products.

› for eProcurement, ease of use will lead to greater savings. New saas solutions increasingly provide ease of use that encourages employees to buy from preferred vendors and capture negotiated savings. CIos should look for eProcurement solutions that make it easy for employees to make the routine purchases of indirect materials that they need for their work.

› for eSourcing, look for new options that line-of-business users can use. Many of the incumbent esourcing products are high-powered tools designed for sourcing professionals to use in acquiring commodity products at the lowest price. New esourcing products like scout rFP and updated saas products with improved usability for business users may well be better candidates than the old-line esourcing tools in use today. For sourcing of complex categories like telecommunications or freight transportation, you may need to use one of the specialist sourcing tools in addition to your main esourcing product.

› for eInvoicing, make sure finance organization is involved in the selection. CFos and the head of AP may have their own requirement that will cause them to prefer a specialist eInvoicing solution over the module in a suite. And a firm in an industry that must process lots of paper applications and forms may be better off with an eInvoicing solution from a multichannel capture vendor that can handle paper invoices as well. Get the key stakeholders involved in the purchasing decision to ensure that you have the right buy-in.

› for spend analysis, focus on vendors that have clients in your industry. All things being equal, choose a spend analysis vendor that also offers esourcing that you like. However, all things may not be equal. A vendor can only acquire a rich knowledge base by working with multiple companies in your industry, and training its analytics engine by learning from its mistakes. so, given a choice, go with the vendor that has deep experience in your industry.

For CIos



25


supplemental Material

Online Resource

The underlying spreadsheet detailing the forecast in Figures 2-5 is available online.

companies Interviewed for This Report

Achilles

Adaco (prior to its acquisition by Fourth)

ADP P2P (prior to its acquisition by oilDex)

Apttus

Aquiire (Vinimaya)

Aravo

Ariba (prior to its acquisition by sAP)

AVEVA ProCon (formerly 8over8)

b-pack (prior to its acquisition by Determine)

Basware

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For CIos



26


Beeline

BidEnergy

Bidsync

Billtrust

BIQ

Birchstreet

BizNet solutions

Bottomline Technologies

Bravosolution

BuyerQuest

Capgemini IBX (prior to its acquisition by Tradeshift)

Cegedim Deskom

Chrome river

Citicus

CLM Matrix

CMA Contiki (prior to its acquisition by Exari)

Cobblestone

CombineNet (prior to its acquisition by sciQuest, now JAGGAEr)

Conga Novatus

Corridor

Cortex

Coupa

Curtis-Fitch

CVM solutions

DCr Workforce

Determine

E2open

Ecteon

Edgeverve

Elemica

Epicor

ePlus

Esize

Esker

Exari

Exigent

Exostar

Fieldglass (prior to its acquisition by sAP)

Fundtech (Accountis)

GEP

GHX

Gimmal

GT Nexus (prior to its acquisition by Infor)

Hellios

HICX

Hiperos

Hubwoo (prior to its acquisition by Perfect Commerce)

Iasta (prior to its acquisition by Determine)

IBM Emptoris

Icertis

i-Faber

Infor

Informatica

For CIos



27


Intesource (prior to its acquisition by Proactis)

IQNavigator (prior to its merger with Beeline)

ITEsoFT

Ivalua

JAGGAEr (formerly sciQuest)

Keelvar

Kofax

Lavante

MediaGrif

Mercado Eletronico

MM4

Model N

NeoGrid

Nipendo

oilDex

openText

openWindows

opusCapita

oracle (including eBusiness suite, JD Edwards, oracle Cloud Procurement, and Peoplesoft)

Paramount Technologies

PAYBoX (formerly Direct Insite)

PeopleFluent

Perfect Commerce

Pool4Tool

Proactis

Procserve (prior to its acquisition by Basware)

Procurestaff (prior to its acquisition by

IQNavigator)

Promena

Pro Unlimited

Provade

PurchasingNet

Puridiom (prior to its acquisition by Bravosolution)

readsoft (prior to its acquisition by Lexmark, now spun-off as Kofax)

revitas (prior to its acquisition by Model N)

rosslyn Analytics

sAP

scanmarket

scout rFP

seal software

sEsAMI

siemens PLM

sievo

spend360 (prior to its acquisition by Coupa)

spendHQ

springCM

supplyon

symfact

U.s. Bank Freight Payment (formerly syncada)

synerTrade

Taulia

Trade Extensions

Tradeshift

Transcepta

For CIos



28


Tungsten Technologies

Verian Technologies (prior to its acquisition by Basware)

VersaPay

Viewpost

Vortal

Wax Digital

Xeeva

ZeroChaos

Zycus

Endnotes1 see the Forrester report “The Forrester Wave™: eProcurement, Q2 2014.”


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