Gartner P2P MQ 2021 is a great equalizer; AI is the key differentiator

Posted on October 28, 2021


The much-awaited report for the sourcing and procurement professionals – the 6th edition of the Gartner Magic Quadrant for Procure to Pay suites is out.

For those unfamiliar with the MQ, this is how the Gartner Magic Quadrant (GMQ) works. It outlines market trends, as well as the maturity of the market and current market participants. Gartner MQ may not be the only determinant but certainly plays a crucial role in how a CPO or a CTO determines which vendor or technology they would like to select.

I have been at the forefront of the sourcing industry for over four decades. During that time, I have had a ringside view of how technology has evolved over the years. There have been periods of incremental improvements, and then there have been quantum leaps at least 2 or 3 times in the past decade which transformed the modern Source to Pay practice.

Coming on the back of the pandemic year, the 2021 GMQ for P2P, therefore, holds particular importance.

Here is a synopsis of the key highlights from the report:

Firstly -Gartner had made two interesting observations

  • Interest in P2P suites has increased because of the pandemic, and
  • P2P is the second-highest inquiry volume topic within sourcing and procurement applications.

These are clear indicators that the industry may be moving towards taking a more holistic view of Source to Pay.

Secondly – the 2021 MQ has all vendors bunched up together!

In looking at the quadrant for this year, it’s safe to say that the usual suspects made it to the shortlist. I made a quick comparison of this year’s quadrant with last year’s quadrant.

The fact that six prominent vendors (Coupa, Ariba, Zycus, Ivalua, Jaggaer and Medius) are “clustered,” with no single vendor standing out is noteworthy.

The traditional leaders – both Coupa and Ariba have significantly come down on both axes. Ivalua seems to have fallen on the ability to execute, while Jaggaer has inched up marginally. Of the six, it appears that Zycus has made the most significant jump from the standpoint of completeness of vision and the ability to execute.

So, thinking from a CPO or CTO’s point of view, I would be interested in knowing the 5-6 vendors I must evaluate and how they have been performing over the past couple of years.

Finally: When you glean through the write up of all the vendors on the GMQ, four key trends emerge:

  1. Artificial Intelligence

AI is no longer an experimental offering and is now clearly a strong differentiator for a few vendors. Zycus has emerged as a distinctive leader in AI-powered full suite vendor in Gartner’s 2021 GMQ. A couple of other vendors are making initial investments in AI as well.

If you are looking to the ‘future’ and considering a vendor partner for the next decade, you should undoubtedly consider AI offerings as a core evaluation parameter.

  • APIA is now core to Procure to Pay

For years corporates looked at specialist vendors for Invoice processing or relied on outsourcing agencies. However, based on their industry interactions, Gartner has highlighted that companies are now considering APIA as core to their S2P process and ideally want the same S2P vendor to offer sophisticated APIA solutions.

While Gartner highlights a few “specialist” APIA players like Basware, they also cite Coupa and Zycus as full-suite providers with robust APIA offerings.     

  • Partner ecosystem

As companies undertake P2P transformations and consolidate their S2P with 1 or 2 vendors, implementation and change management are more critical now than ever. As a result, Gartner is paying particular attention to the Partner ecosystem of various vendors.

Interestingly most vendors have scored lower this year on partner ecosystem. Most have got “Cautionary notes” in their evaluation for a sup-par partner ecosystem. One exception is Zycus, who seems to have invested significantly in building a robust partner ecosystem.

  • Direct spend

When it comes to direct spend, one of the more immediate questions that come to mind is whether companies are truly moving their direct spend management to S2P specialist vendors? While a few vendors like Coupa, GEP and others have built direct spend capabilities, would it be prudent for companies to move this functionality away from their ERPs and supply chain software into the S2P software beyond the supplier collaboration aspect?

With Gartner expecting to see continued investments in full S2P suites, it will be interesting to watch how the procure-to-pay space evolves in the coming years. Of even greater interest is identifying which vendors will be the pioneers in driving the Cognitive-AI agenda.

Posted in: Commentary