The Ardent Partners analyst team recently attended the 2024 Ivalua NOW: Procurement Re-Imaged conference in Miami. This event came on the heels of the company’s slightly larger EMEA conference held in Versailles, France (our own Magnus Bergfors, VP of research, wrote about his attendance at the event). Ivalua is known for selecting unique venues for its user conferences and it didn’t disappoint in 2024.
Today’s dispatch from the conference introduces the “Innovation Showcase & 2024-2025 Product Roadmap” session, featuring Ivalua’s vice president of product and customer marketing, Vishal Patel, and chief product officer, Pascal Bensoussan. Patel and Bensoussan discussed exciting Ivalua offerings and innovations currently available as well as those that lie on the horizon.
The first order of business was providing a sneak peek at Ivalua’s generative AI-powered platform IVA. Ivalua wanted to deliver strong GenAI functionality at platform level to provide customers and partners with the keys to create their own use cases. While communicating with a large language model like ChatGPT has its purposes, customers and partners can go much further when leveraging their own data from enterprise documents, sourcing events, contract invoices, etc. Generative AI brings the ability to code, create automation, and deliver reasoning and decisioning. Patel and Bensoussan said it’s essentially a new operating system, a new computing paradigm that can be controlled by natural language.
They provided a few use-case examples to highlight IVA’s functionality and capabilities, including:
- Providing IVA with a contract, the platform can understand and summarize the contract and create a list of questions to better understand the content of the contract. Who are the contract parties? What are the consequences of a contract breach? While this information is spread throughout the contract, IVA compiles that information and delivers an articulated answer.
- Content creation is another use case of IVA. Customers can use IVA to write emails, such as the announcement of a new chief procurement officer. IVA can write a comprehensive email based on the designated tone, such as enthusiastic or regretful.
- Contract summarization is also an efficient feature of IVA, allowing a mobile user to ask IVA to review and summarize a contract’s key terms (e.g., obligations, buyer risks, etc.) as a quick first glance. A user may not have time to review a 60-page contract, but using their mobile device, IVA can quickly produce a valuable contract summation.
- IVA can also be valuable for supplier performance evaluations. For example, a supplier evaluation that asks 11 questions can be summarized by IVA with the strengths, weaknesses and challenge areas of the supplier. Going a step further, the user can ask IVA for a supplier improvement plan — which IVA does with objectives and relative timeframes as well as specific tactics to achieve the objectives and KPIs to track progress.
Following the IVA demonstration, the session transitioned to the focus on three themes: 1) Source-to-Contract, 2) Procure-to-Pay, and 3) Platform & AI. Within each theme were three topic areas:
Source-to-Contract
- Automated Supplier Data Management
- Sourcing Efficiency & Direct Sourcing
- AI-Powered Enterprise Contract Management
Procure-to-Pay
- External Workforce & Catalog Management
- Global Tax Compliance & AP Automation
- Payments & Working Capital Management
Platform & AI
- Intake Management & Orchestration
- Robust Platform & Easier Integration
- Actionable & Pervasive Generative AI
Our dispatch today focuses on the Source-to-Contract theme and its three related topic areas. What follows is Patel and Bensoussan’s overview and discussion of the offerings and trends within Ivalua’s source-to-contract strategic roadmap.
Automated Supplier Data Management
Patel and Bensoussan opened the discussion by noting how supplier management plays a critical role in the foundation of streamlined source-to-pay processes and data management. In 2023, Ivalua took significant strides in automating supplier management processes, such as data collection, risk assessment, and supplier segmentation, where questionnaires around various criteria like carbon emissions or quality can be generated to collect additional information or documentation from suppliers. The focus was on ensuring quality, efficiency, and accuracy in supplier records across multiple ERPs. It enabled automated systems to suggest relationships between different records coming from the same or multiple ERP systems and merging those duplicate suppliers while maintaining transactional information integrity.
Another area of importance for Ivalua is mobile accessibility to facilitate supplier self-registration and onboarding through mobile devices. This initiative particularly benefits suppliers in industries like construction who are frequently on the go and in the field. Automation remains a key area of focus, aiming to integrate supplier relationship management, workflows, risk analysis, and compliance metrics to enhance decision-making processes and operational efficiency.
The complexity of data management, especially regarding vendor master data, said Patel and Bensoussan, presents significant challenges for organizations. Despite this complexity, efforts to tackle data management issues head-on have resulted in improved efficiency and reliability in supplier interactions. The average time and effort required for supplier search and onboarding processes (40 hours) underscores the need for streamlined and automated solutions in managing vendor data effectively.
Effective communication, robust market research, and reliable vendor records are vital components for engaging collaboratively with suppliers. By ensuring clean and accurate data, organizations can foster strong and transparent relationships with suppliers, driving efficiency and trust in procurement processes, explained Patel and Bensoussan. Overall, the focus on automation and data management in supplier relations is set to revolutionize the way organizations interact with and manage their supplier base, paving the way for enhanced collaboration and operational excellence.
Sourcing Efficiency & Direct Sourcing
The second focus area, Sourcing Efficiency & Direct Sourcing, is poised for significant advancements in the coming year, particularly around generative AI (GenAI) in the sourcing process. Ivalua’s R&D team is exploring how sourcing projects are approached by utilizing AI capabilities to analyze RFPs, identify inconsistencies, and generate insightful questions for suppliers.
Beyond AI integration, the emphasis is also on simplifying and accelerating sourcing activities. Patel and Bensoussan said enhancements in data accessibility, streamlined browsing experiences, and improved sourcing event tracking tools are set to revolutionize sourcing efficiency. Expect to see the introduction of sophisticated analytics through operational and strategic sourcing dashboards, offering valuable insights for informed decision-making.
On the direct sourcing side, Patel and Bensoussan cited particular attention towards managing bill of materials (BOMs) effectively. Thus, enabling scenario creation and editing the BOM within the Ivalua platform is critical to the alignment of cost drivers and market intelligence with commodity indexes and prices, ensuring enhanced cost management integration within sourcing processes. Ivalua has already launched an add-on product to handle commodity pricing at the contract level, facilitating dynamic updates based on market indices and formulas.
Integration is integral to the Ivalua platform and its unified approach to sourcing events. When comparing supplier proposals, having the ability to leverage the connection between sourcing activities and supplementary data sources, such as supplier relationship management as well as Environmental, Social, and Governance (ESG) information, enables comprehensive supplier evaluations and risk assessment. This holistic approach not only enhances transparency and visibility during sourcing events but also facilitates data-driven sourcing optimization based on diverse criteria beyond cost considerations.
AI-Powered Enterprise Contract Management
The third area of focus, contract lifecycle management (CLM), is a personal one for Bensoussan who led many of the early CLM innovations for Ivalua. As the company collaborates closely with CLM customers, Ivalua is working toward the next level of CLM solutions. There is a substantial effort to understand how different stakeholders — legal departments, procurement teams, and even those outside traditional procurement roles — interact with contracts. A great deal of time is spent fine tuning the overall user experience, particularly with regard to contract monitoring, review, and approval.
One of the critical insights gathered from customer feedback is the importance of mobile review and approval capabilities. Users need the convenience of reviewing contracts quickly on their mobile devices. Following two years of investment in contract data capture technology, Patel and Bensoussan said Ivalua now possesses the necessary tools and capabilities. Integrating generative AI has further revolutionized this process by providing efficient and reliable contract summarization. This advancement is particularly beneficial for users reviewing lengthy contracts on smaller screens, enabling faster and more effective decision-making.
Patel and Bensoussan explained that generative AI is poised to play a crucial role in contract content adjustment. However, it is essential to note that AI should not operate in isolation. Instead, it should be grounded in an organization’s existing intellectual capital and legal clauses approved by legal — thus serving as the benchmark or starting point.
Think of it as a redlining feature that takes into account the language that the supplier has changed in your contract, the baseline language from the internal legal team, and what is produced by GenAI to optimize the final contract content. This approach ensures that contracts are guided by user-defined instructions using natural language. Customers can expect more on this offering later in the year.
Finally, Patel and Bensoussan spoke about automation, particularly as it relates to dynamic contract templates. Dynamic contract templates can be developed based on specific questions answered during the drafting process. This dynamic approach allows for the automatic inclusion or exclusion of clauses, ensuring that each contract is relevant and context specific. By automating these elements, organizations can achieve greater efficiency and accelerate cycle times.
Our next dispatch continues coverage of the Innovation Showcase & 2024-2025 Product Roadmap, with a focus on the Procure-to-Pay theme and its three topic areas: External Workforce & Catalog Management; Global Tax Compliance & AP Automation; and Payments & Working Capital Management.
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