I’m LV, co-founder and CEO of Taloflow, a technology selection platform built for the AI productivity era. I’ve spent more than a year interviewing over 200 enterprise IT procurement professionals and IT and Engineering decision-makers and have found that the space of software selection and procurement is undergoing a sea change in expectations.
Based on the interviews, I’ve determined nine steps in the software procurement lifecycle, but these are more fluid than ever. Some latter steps, especially once procurement professionals get involved in software vendor selection, are not exactly "agile" yet.
The steps are:
Discovery
Software Vendor Selection
RFP* (can be in many places in this order)
Requisition* (We’re seeing a shift in the market from intake-to-procure to intake-to-pay processes)
Negotiation
Contracting
Implementation
Management
Renewal
There's also a wave of disruption in terms of services addressing each step. Zip is disrupting Coupa and SAP Ariba in the requisition space, whereas we're positioning Taloflow (our company) to challenge Gartner in vendor comparison.
Here's the list of categories and some corresponding vendors for each part of the lifecycle:
This is the initial phase where businesses identify their needs and objectives before starting a thorough software vendor selection process.
Analyze the current technological landscape.
Determine gaps and desired functionality in the vendor assessment.
Conduct market research to find available solutions.
G2
G2 has millions of user-generated reviews on software and services, helping businesses make informed purchasing decisions.
Pros:
Extensive user reviews with good filtering options to find what’s relevant.
Monty is G2’s AI assistant powered by ChatGPT to help run vendor comparisons.
A wide range of software categories is covered in a well-organized taxonomy of like services.
While G2 makes money from vendors, it is largely free from bias because it does so largely by selling “buyer intent” data rather than advertising or sponsored content.
Cons:
User reviews are skewed positive, with few “gotchas” mentioned, which may impact your ability to find the right software vendor.
Google
At the top of the software discovery funnel, Google presents news, articles, and other content tailored to your keyword search.
Pros:
Highly personalized content based on the specificity of keywords (e.g., “What are some top S3 alternatives?”.
Helps find content that is of high authority
Cons:
It’s a crude filtering tool that requires extensive reading and large amounts of open tabs to find relevant information. However, simple vendor comparisons are easy to find.
Capterra
Like G2, Capterra has many reviews but acts more like an intermediary between buyers and technology vendors.
Pros:
Wide variety of software options.
Easy comparison and filtering tools.
Cons:
Not as much depth as G2 in many software categories.
Owned by Gartner, vendors pay for leads, so vendor partnerships may have some influence.
Software Selection
During this phase, businesses evaluate and compare vendors.
Criteria are considered, and priorities are weighted
Match requirements to vendor capabilities
Shortlist 1-3 potential solutions
Compiling a list of vendor capabilities against your software requirements may be exhausting, especially in an environment where a feature release or two can significantly impact the outcomes. This is why running software vendor evaluations is one of the most hated parts of the job for IT and engineering professionals.
Gartner
Gartner is a $5B+ yearly behemoth research and advisory company providing insights and services to buyers and vendors. It’s also been around for more than 45 years and has credible analysts to tap into for insights for vendor evaluations.
Pros:
Trusted and comprehensive research with wide industry coverage.
Cons:
Services are prohibitively expensive for many companies, with subscriptions for 1-2 seats starting at approximately $50,000 annually.
The information might be too general for specific needs, and while analyst calls (i.e., “inquiries”) can provide additional insights, they’re short and take a while to book.
Taloflow
Taloflow offers a technology selection platform that helps businesses make faster and more informed technology vendor selections. It provides insights and analytics to compare various technology options.
Pros:
Quick decision-making with detailed analysis factoring in hundreds of requirements, dimensions, and features.
Insights are tailored to your precise use case.
Extensive database of tech vendors, with data kept fresh.
Analysts are available on-demand to provide additional context.
Goes beyond traditional enterprise software and tackles developer tools, platforms, cloud services, etc.
Cons:
It may have limited coverage in some niche markets.
TEC
Founded in 1993, Technology Evaluation Centers (TEC) specialized in ERP and traditional enterprise software suites.
Pros:
Impartial and detailed software evaluations for big-budget decisions.
Customized advice for large organizations is presented in detail.
Cons:
It can be overwhelming with too much information and complexity.
The evaluation process may be time-consuming and is not “agile.”
SelectHub
SelectHub is a cloud-based technology selection management platform covering many categories in the enterprise software industry.
Pros:
Wide range of selection tools and resources.
Cons:
Complexity for first-time users.
Overwhelming information depth.
Poor UX.
Olive
Olive is a software sourcing platform that centralizes the RFP process.
Pros:
Reduces timelines for sourcing and evaluating enterprise technology.
Allows for input from key organizational stakeholders.
Cons:
RFx oriented. It may be complex for organizations new to digital RFP processes.
Focused primarily on software sourcing, which might not cover all procurement needs.
Software RFP (Request for Proposal)
An RFP is a formal document sent to vendors requesting detailed information about their offerings.
Contact vendors with a formal document
Outline the scope and requirements
Ask for solutions, costs, and terms
Workday Strategic Sourcing
Workday Strategic Sourcing, previously Scout RFP, is a procurement platform that assists businesses in managing sourcing and procurement processes more efficiently, enhancing supplier engagement.
Pros:
Streamlines sourcing and procurement processes.
Effective supplier engagement management.
Cons:
It might require a learning curve for new users.
Integration with existing procurement systems may be complex.
Responsive (formerly RFPIO)
Responsive (formerly RFPIO) is a software platform designed to streamline the request for proposal (RFP) process. It assists organizations in creating, managing, and responding to RFPs more efficiently with collaboration tools and a centralized knowledge base.
Pros:
Enhances efficiency in RFP creation and response.
Centralized knowledge base for streamlined collaboration.
Cons:
It may have a learning curve for new users.
The cost might be a consideration for smaller organizations.
Software Requisition Software
Once a solution is chosen, an internal request for procurement is created.
Necessary approvals are obtained.
Budgets are in place.
Intake-to-procure
SAP Ariba
SAP Ariba is a comprehensive cloud-based procurement solution that helps businesses manage their procurement and supply chain processes. It offers a range of features from sourcing to payment, facilitating better supplier relationships.
Pros:
Wide range of procurement and supply chain management features.
Facilitates improved supplier collaboration and relationship management.
Cons:
It can be complex to implement and use.
It may require significant investment.
Coupa
Coupa is a cloud-based business spend management platform. It offers solutions for procurement, invoicing, expenses, and spend analysis that aim to optimize business spending and supply chain processes.
Pros:
Integrated platform for various aspects of spend management.
Offers real-time spend analysis and reporting.
Cons:
The initial setup and integration may be complex.
Might be more suited for larger organizations than smaller ones.
Zip
Zip is a platform designed to simplify the process of requisition and procurement. It helps businesses streamline their purchase requests, approvals, and vendor management, enhancing the overall efficiency of procurement operations.
Pros:
Streamlines requisition and procurement processes, offering both Intake-to-Procure and Intake-to-Pay.
User-friendly interface for easy management and approval workflows.
Cons:
It may not integrate seamlessly with all existing financial systems.
Software Contract Negotiation and Renewal
Vendr
Vendr is a SaaS purchasing platform designed to streamline the software buying process for businesses. It focuses on negotiation and cost optimization, ensuring companies get the best deals on their software purchases.
Pros:
Specializes in SaaS purchase negotiations and cost reduction.
Integrates well with the software discovery process.
Cons:
Almost exclusively focused on SaaS.
Requires approximately $100,000+ in software spend annually.
Tropic
Like Vendr, Tropic is a software procurement platform that aids businesses in managing their SaaS stack, from procurement to renewal. It emphasizes streamlining the negotiation process and managing SaaS renewals efficiently.
Pros:
Comprehensive management of SaaS procurement and renewals.
Integrates well with the software discovery process.
Cons:
Does not cater well to non-SaaS procurement needs.
Requires integration with existing procurement systems.
Software Contracting and MSA
After negotiations, a formal contract is drafted and signed.
Legally binding document
Delineates the ToS and deliverables of both parties
IronClad
IronClad is a digital contract management platform that simplifies creating, managing, and executing contracts, including SaaS contracts.
Pros:
Automates and streamlines the contract management process.
Collaborative.
Cons:
The learning curve for users new to digital contract management.
PandaDoc
PandaDoc is a document automation software for creating, managing, and signing digital documents, including SaaS contracts.
Pros:
Speeds up the doc management process.
Good integration with various business systems.
Cons:
Customization features might be overwhelming for some users.
Not good pricing for smaller businesses.
DocuSign
DocuSign is known for its electronic signature technology, facilitating the digital signing of documents, including SaaS contracts.
Pros:
The leading solution for electronic signatures.
Cons:
It can be costly for full-feature access.
Software Implementation Services
About half of technology purchase decisions fail in what feels like a coin toss. Some of the principal reasons are:
Poor requirements gathering
Poor understanding of vendor capabilities
Poor definition of the use case
Things gone wrong? You’re back to 2. Selection.
Wipro
Wipro is a global information technology, consulting, and business process services company.
Pros:
Wide range of IT and business services.
Cons:
Large-scale operations might lead to less personalized attention.
Deloitte
Deloitte provides professional services, including technology consulting.
Pros:
Comprehensive services spanning various business needs.
Cons:
Services can be costly, so it is usually not a fit unless you’re a large company.
Accenture
Accenture is a multinational professional services company with extensive digital transformation and large-scale technology implementation expertise.
Pros:
Leader in digital transformation services.
Cons:
Services might be expensive for smaller businesses.
SaaS Management Tools
G2 Track
G2 Track is a software management tool for vendor management that helps businesses monitor and optimize their software spend, usage, contracts, and compliance.
Pros:
Efficiently tracks and manages software spending.
Provides useful insights into software utilization and compliance.
Cons:
Targeted primarily at larger organizations.
Zylo
Zylo is a SaaS management platform that offers companies insights into their cloud software spending, usage, and management.
Pros:
Helps avoid redundant applications.
Specialized in managing and optimizing SaaS portfolios.
Identifies cost-saving opportunities in software spending.
Cons:
Focused mainly on SaaS, it may not cover all IT assets.
It might require detailed data integration for full functionality.
BetterCloud
BetterCloud is a SaaS operations management platform that provides IT teams with no-code tools to build workflows for managing and securing SaaS applications with policies across the organization.
Pros:
Automates SaaS management and security tasks with detailed policies.
Offers extensive integrations with popular SaaS applications.
Cons:
It may require lots of deliberation and expertise to customize the workflows for your organization's unique needs.
Notes:
BetterCloud primarily benefits organizations with hundreds of employees and extensive seat-based SaaS usage.
Sastrify
Sastrify is a SaaS cost optimization and management platform. It also offers vendor negotiation support and license management.
Pros:
Focuses on reducing SaaS costs through effective management.
Provides vendor negotiations and license optimization.
Cons:
Mainly suited for businesses with significant SaaS spend.
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