February 6, 2020
TABLE OF CONTENTS
Source-to-Settle (S2S) is a competitive field amongst software providers. Providers are able to stand out in the space by taking risks with innovative features that will improve business professionals’ work and make companies more efficient. This blog highlights some of the tools and topics Levvel Research encountered towards the end of 2019 that we think are going to be relevant in 2020. Right now, these are bubbling up amongst the leaders in S2S, but they will most likely be considered by every company that offers a competitive product in the marketplace in the upcoming year and beyond.
Paying close attention to the back office automation field yields several takeaways. One of the largest over the past few years has been the high level of merger and acquisition (M&A) activity. These transactions are not limited to large companies buying smaller ones or similar companies merging, but also private equity firms purchasing providers of various sizes. Some firms even choose to purchase more than one S2S company.
M&A activity shows no signs of slowing down heading into the new year, and Levvel Research is paying particular attention to deal flow in travel and expense management (TEM) and accounts payable automation. There have already been several big acquisitions in the month of January alone, and we predict this trend will continue full steam ahead into 2021.
In 2019, Levvel Research heard a number of compelling use cases for incorporating virtual payments into organizational finance functions. These products blend features from expense reporting and invoicing software, and employees are issued accounts that link to virtual cards and sometimes physical cards as well. Inside the software, employees can use virtual cards to book travel and other business expenses, and managers have the ability to set limits and approve employee expenses.
Another differentiator is the real-time budgetary insight this software provides. This positions the software as a sort of “spend control center” that can be used by organizations of all sizes and specialties. A few disruptive companies are staking their future success in having a strong virtual card management product, and we believe this will pay off.
Use this report to evaluate whether your organization needs to automate its sourcing. This guide provides information to help organizations identify their unique use case for sourcing automation and serves as a buyer’s guide to sourcing software.
With all of the consolidation in the market, S2S software companies are now able to offer a whole selection of different options to their customers. This can include products for specific industries, organization sizes, and business operations. In the past, the main focus of providers has been offering a comprehensive, exhaustive suite with a variety of modular tools available for automating the entire Procure-to-Pay (P2P) and S2S cycles.
The logic to this approach is that as companies scale and their needs change, they’ll look to add on additional software and eventually implement more and more products offered. Levvel Research has observed a change in this attitude, as more providers are finding it difficult to offer a competitive product for every one of these S2S steps.
While M&A is certainly an attractive and viable option for solving this issue, a problem arises as the fusion shifts the end product into multiple codebases, and the software has to be developed and maintained individually. Additionally, the software typically has a tangibly different feel and experience. This has led some software providers to tweak their strategy and bill themselves as more of a business platform than a suite.
This platform functions as a central ecosystem where the software company provides a crucial set of core functions (sourcing, invoicing, and/or procurement), but opens up their software to partners who have features and solutions for business processes outside of that core set of functions. Levvel Research believes that this can be a smart decision for many software companies; it’s also beneficial for their end-users who now have access to a wider variety of products from different providers.
It’s no secret that the United States lags behind the rest of most of the developed world when it comes to electronic invoicing usage. In the Americas, countries like Mexico, Brazil, and Chile far outpace the US when it comes to adoption and regulation of eInvoicing, but what drove this push in LatAm differs from the factors doing the same in the States.
A huge goal of pushing eInvoicing in these countries was curbing fraud and corruption, a problem the US doesn’t have in the same volume as its neighbors in the Americas. Instead, eInvoicing’s rising popularity in the US is more of a byproduct of other initiatives than an actual goal. The adoption of automation software is rising among companies of all sizes and industries.
Digitization of finance and accounting is a big priority for many companies, and it is impossible to achieve this without true electronic invoicing. P2P tools help realize this goal and also create an environment where electronic invoices can be exchanged. Additionally, companies doing business internationally must adhere to other countries’ eInvoicing standards and mandates.
But what makes 2020 a landmark year for electronic invoicing in the US? The Business Payment Coalition, a volunteer effort led by the Federal Reserve and a combination of businesses and individuals, is scheduled to publish two of its most crucial reports: a semantic model requirement, which will define and standardize the information required for an electronic invoice, and a technical validation assessment, which will do the same for the technical architecture of sending and receiving electronic invoices.
Look out for part two of this blog for additional software trends to watch in 2020.
Major Bottoms Jr.
Research Senior Manager
Major Bottoms Jr. is a Research Consultant for Levvel Research based in Charlotte, NC. He plays a key role in the analysis and presentation of data for Levvel’s research reports, webinars, and consulting engagements. Major’s expertise lies in the Procure-to-Pay, Source-to-Settle, and travel and expense management processes and software, as well as technologies and strategies across DevOps, digital payments, design systems, and application development. Prior to joining Levvel, Major held various roles in the mortgage finance field at Bank of America and Wells Fargo. Major graduated with a degree in Finance from the Robert H. Smith School of Business at the University of Maryland.
Anna Barnett is a Research Senior Manager for Levvel Research. She manages Levvel's team of analysts and all research content delivery, and helps lead research development strategy for the firm's many technology focus areas. Anna joined Levvel through the acquisition of PayStream Advisors, and for the past several years has served as an expert in several facets of business process automation software. She also covers digital transformation trends and technology, including around DevOps strategy, design systems, application development, and cloud migration. Anna has extensive experience in research-based analytical writing and editing, as well as sales and marketing content creation.
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