Supplier value management (SVM) platforms is a critical enterprise software category enabling enterprises to implement their source-to-pay processes. Enterprises seeking a system of record for all supplier spend and supplier information are busy unbundling enterprise resource planning and other “procurement” tools such as Excel and embracing SVM platforms. Typically, enterprise adoption starts with one or two processes such as upstream source-to-contract and/or downstream procure-to-pay (P2P) subprocesses and then expands further into other processes later.
I just published The Forrester Wave™: Supplier Value Management Platforms, Q3 2024, which includes nine leading SVM platform providers. Earlier, I published The Supplier Value Management Platforms Landscape, Q2 2024, which delved into a larger number of vendors, including some new startup/scale-up specialists. As I evaluated the vendors, spoke to their customers, and reflected on the inquiries and guidance sessions that I received from end-user customers, I see the following four key trends that have high impact on procurement technology:
- Buyers don’t believe that SVM platforms are a one-stop shop. The SVM suite is touted by vendors as single-source-of-truth, comprehensive, unified suite messaging. The daily reality for customers is rather different, however. One customer I spoke with used the term “beautified suites” to refer to most SVM suites that are a conglomeration of individual applications integrated in a piecemeal fashion. Mature customers have complemented SVM platform providers with specific best-of-breed specialist solutions, with the logic that a suite cannot be world-class in all its modules.
- Procurement is transforming from a tactical function to a strategic business enabler. Procurement has always been laser-focused on reducing cost, but procurement leaders are being tasked with shifting to supporting strategic business priorities including sustainability, innovation, resilience, and managing enterprise risk. Procurement teams are leveraging software-as-a-service-based SVM solutions that digitize transactions and automate arduous tasks such as invoicing, purchase order generation, or RFX processes. Procurement leaders are using this freed-up time to focus on more value-generating activities in their own functions and extend these benefits to suppliers and supply chain partners.
- Generative AI (genAI) is becoming embedded in procurement processes. The SVM platforms evaluated leverage AI-powered tools to automate, speed up, and enhance the quality of data processing to optimize decision-making. GenAI-powered SVM platforms utilize no-code/low-code configuration and intelligent workflows to automate and streamline P2P processes including purchase requisition, purchase-order creation, accounts-payable invoice automation, and payments. We also saw automation of source-to-award workflows including contract redlining and clause comparisons, bringing substantial benefits such as improved productivity, risk mitigation, and accelerated innovation.
- SVM vendors are investing in environmental, social, and governance (ESG) capabilities, but US progress will be slow. The US Securities and Exchange Commission’s announcement to drop the requirement for US-listed companies to disclose Scope 3 emissions will slow ESG progress in the US. All SVM vendor strategies demonstrate a commitment to expanding ESG capabilities such as carbon emission measurement or fossil fuel usage. While most vendors focus their solutions on environmental sustainability, others in the market, including some best-of-breed players, focus exclusively on the ‘S’ and ‘G’ in addition to environmental factors.
The SVM market is proliferating with new players constantly arriving, especially in specialist areas. For those who wish to dive deeper, Forrester clients will find the SVM Wave evaluation here and can request a guidance session or inquiry with me.
