Ardent Partners receives regular briefings from most of the solution providers in the broader supply management market. As a firm, we’ve covered the distinct application markets for years and have traditionally used the information we receive in briefings in our solution selection work and inquiries with enterprises as well as in some published research. But, as we’ve expanded our publishing on both CPO Rising and Payables Place, we now have a greater opportunity to share some of these updates with our readership and community. Additionally, Ardent Partners remains steadfast in its “open door” briefing policy (if you have a viable solution in the market, you can easily schedule a briefing with us), a policy that some others in the space do not follow (to brief some firms, you must be a paying customer). My main point is if you are a solution provider and aren’t briefing us, you may want to reconsider that. Now, on to today’s article which highlights a recent briefing we received from Zycus led by former analyst and longstanding industry pro, Richard Waugh, Zycus’ Vice President, Corporate Development.
Zycus: A Briefing in Several Parts
Professionals working in procurement over the last decade should be familiar with Zycus given its strong heritage (and solutions) focused in spend analysis. But over the last few years, Zycus has continued to execute on its plan to deliver a full source-to-pay suite, beginning many years ago with the acquisition and relaunch of a well-regarded sourcing solution, continuing with the development of a contract management solution and supplier management modules before ambitiously developing and launching its own P2P solution set. Because of its success in Spend Analysis, Zycus works hard to avoid being pegged in that category and it is for this reason that Zycus chose in our latest briefing to focus solely on its customer wins – specifically nine recent/2014 customer wins. When tallied these deals include 4 suite deals (including 1 full Zycus Source-to-Pay suite deal and 3 strategic sourcing suite deals), 3 Spend Analysis and eSourcing combo deals, 1 Supplier Information Management and Supplier Performance Management deal, and 1 standalone Spend Analysis deal. The deals were a blend of ‘greenfield’ opportunities (where this type of technology is being deployed for the first time) and replacement deals.
The broadening of technology RFPs to include more than a single application is a trend that began about a decade ago but only began to emerge more strongly in the last few years. According to Waugh, about 75% of all new RFPs that Zycus sees include multiple applications (or a suite) versus the roughly 25% of RFPs that focus on a single technology application. Zycus’ multi-application RFP percentage is higher than our own estimates, but an indicator, nonetheless, that procurement departments today increasingly prefer to streamline their technology infrastructure with fewer suppliers.
We’re highlighting a few of the new Zycus deals below. It’s important to note that when delivering an analyst briefing, solution providers invariably focus on their triumphs and successes, rather than their failings and losses. It is our role as analysts to discern between hype and reality and why we independently spoke to two of the three companies presented below to validate Zycus’ presentation. Additionally, a solution provider often does not have a full view into the final criteria and reasons why a customer awarded it a contract. Our win-loss analysis/consulting work shows this to be true time and time again.
Customer – Large Telco
This win was a replacement deal for a company with 200 users and more than 30,000 suppliers. This procurement team is relatively mature and has been using technology solutions for more than a decade. Zycus believes that the tight integration across its suite and the ability to present “one view” across all of the applications contributed significantly to the win which includes the standard strategic sourcing solution plus supplier management and financial savings management.
Customer – Privately-held Consumer Products Company
This relative young, but high-growth company, was a “greenfield” opportunity where a newly formed procurement department was looking for a full suite to automate its processes. The company’s back-end was NetSuite and the win was one of Zycus’ first full suite deals. The company plans to begin the project by deploying Zycus’ P2P solutions alongside Spend Analysis before rounding it out with a phase 2 deployment of eSourcing and Contracts. This strategy will enable the procurement department to get its hand around its spend and develop general policies while providing some time to hire in a new strategic sourcing team. This customer said that beyond Zycus’ solution strength and deal packaging, they were impressed with Zycus’ responsiveness and felt very comfortable working with the Zycus team on this long-term project.
Customer – St Barbara Limited (Australian Gold and Mining Company)
St Barbara selected Zycus to deliver Spend Analysis, eSourcing, Contracts, and Supplier Management as part of its procurement transformation initiative that will automate and centralize sourcing and procurement operations and move from an excel-based bidding process. The procurement leadership team valued the ease-of-use of the Zycus’ solutions as well as the company’s responsiveness and flexibility through a competitive pilot process.
Clearly, Zycus does not win every RFP, no company does. But it is also clear that Zycus’ solution expansion strategy has helped it compete more favorably in larger suite deals than in years past.
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