Where Procurement Meets Finance: Technology Vendors
A new report from Aite Group provides an overview of supplier finance technology vendors, which are enabling corporate procurement to demonstrate its value to the bottom line. Based on an October 2010 Aite Group survey of 27 European corporate executives, this report follows Aite Group’s April 2011 report, ‘When Procurement Meets Finance: Creating Corporate Value’.
Corporate value creation must be measured through a system of indicators that takes into account the corporate’s: profit and loss (P&L) dynamics, where value is proportional to the reduction of expenses; the balance sheet, where value is derived from the optimisation of the capital employed; and the risks of dealing with external counterparties, such as suppliers and banks. Supplier finance technology solutions are evolving into supplier relationship management (SRM) solutions to support corporate users in generating business value.
“The convergence of activities between the procurement function and the world of finance is inevitable,” said Enrico Camerinelli, senior analyst with Aite Group and author of this report. “The heads of procurement are now looking to SRM offerings not only for technical features and functionalities, but also for innovative solutions that enable the department to articulate its contribution to corporate business value.”
SRM solution vendors profiled include Ariba, Basware, Bottomline Technologies, Corporate LinX, Lighthouse BCS, Oxygen Finance, and Taulia. Each is mapped on Aite Group’s ‘value map model’, which graphically illustrates the tight interconnection and mutual dependence between the main components of corporate value creation – P&L, balance sheet and risk.