JAGGAER for Digitally Transforming Sourcing and Purchasing

JAGGAER offers cloud-based software for sourcing and purchasing that is designed to organize and manage the processes in which organizations buy goods or services from their suppliers. When those items are used to create an organization’s products or services, it is called direct or strategic spend, while buying things like office supplies and computers needed to operate the organization is called indirect spend. For a business that deals in products, direct spend is a significant element of its cost structure, so careful attention must be focused on prices paid, acquisition costs and how well the processes are performed. In acquiring this type of software, organizations are looking to reduce their cost of sales, increase the efficiency of the sourcing and buying processes, increase compliance with purchasing requirements, reduce duplicative spend, enable more effective management of vendors and increase visibility into where money is spent to manage more intelligently.

The focus on digitally transforming sourcing and purchasing has accelerated over the past three years for several reasons. Disruptions in supply chains because of the pandemic lockdowns as well as the reordering of global trade have made organizations more aware of the need to diversify their sources of material, as well as better monitor the quality and timeliness of suppliers’ deliveries to avoid disruptions and the resulting impact on profitability and customer satisfaction. The need to preserve profit margins in a period of higher inflation has also been a factor. This is in addition to the need to secure the best pricing and avoid errors in ordering items and quantities. Increasingly, those who make sourcing decisions must also be mindful of meeting environmental and social requirements and the value of digitizing processes to facilitate data gathering and reporting needs.

The company offers JAGGAER One, a suite of procurement software designed mainly to manage direct or strategic spend that can be acquired singly or function as a full source-to-pay set of capabilities. Ventana Research asserts that by 2027, only one-fourth of larger organizations will consistently manage source-to-pay end-to-end, but those that do will outperform competitors. The components include Sourcing, Contracts Management, Supplier Management, Category Management, Inventory Management, Quality Management, Invoicing, Supply Chain Collaboration and Spend Analytics. It is designed to deal with complex direct procurement, logistics and quality management processes, making them more efficient through automation while providing insightful analytics to improve performance.

Sourcing software helps manage, organize and, wherever possible, automate the selection of suppliers in a competitive process. Supplier management software facilitates onboarding, maintaining and managing supplier relationships facilitate supporting ongoing objective evaluations of vendors. Software for contracts seeks to reduce paperwork friction in the authoring, edit, review and approvals processes by using automated workflows, while ensuring that documents comply with internal, regulatory, and legal requirements. Category management helps organizations devise and handle supplier-specific strategies. Inventory management, in this case, tracks and manages even complex stockroom inventories. Quality is an ongoing consideration in dealing with vendors, and software facilitates the administration of nitty-gritty details to enable objective high-level assessments of suppliers. Supply chain collaboration facilitates communication and information exchange with suppliers, while spend analytics provides insight and visibility for sourcing and purchasing professionals. Because many of the processes handled by sourcing and purchasing software complement ERP functionality, the ability to easily integrate with these applications is an important consideration for buyers.

Among the larger sourcing and purchasing software companies, JAGGAER competes with a variety of larger business application and dedicated vendors.. However, similar functionality is provided to some degree by ERP vendors as well as a large number of point solution providers. Often, organizations rely on manual approaches supported by standalone spreadsheets or home-grown database applications. JAGGAER is currently controlled by the private equity firms Cinven and Accel-KKR. Perhaps seeing an opportunity to further consolidate the category and gain from the need to digitally transform sourcing and purchasing, private equity groups have acquired Basware (Accel-KKR) and Coupa (Thoma Bravo).

Ventana Research recommends that companies assess their sourcing and purchasing processes, especially for strategic goods and services, as well as the software that supports the related processes. This is especially the case for midsize organizations that may be using outdated and disorganized methods that have gone unnoticed as they have grown. JAGGAER One’s suite should be on their long list of vendors for assessment — either for a specific point solution or a more comprehensive set of capabilities up to the full suite.