Originally posted in Spendmatters.com
Each year, some companies on the Spend Matters 50 Providers to Know and 50 Providers to Watch lists push themselves beyond simply a standout performance. They earn the recognition that they are not only bringing innovation into procurement organizations but also leading the charge to change the way we do business for the better. These are the providers who shifted from Watch to Know in 2019, like APEX Analytix.
To learn more about these providers, we reached out to a few such cases in our 2019 50/50 lists, asking how they’ve changed over the years and what differentiates them from the competition.
Today’s Q&A features Danny Thompson, SVP, Market & Product Strategy at APEX Analytix.
In case our readers aren’t fully familiar, can you give us a one-sentence summary of what your company does?
The world’s largest companies use APEX Analytix software, data and services to manage suppliers, recover overpayments, and prevent fraud and payment errors.
How has your company changed since it was first named a Provider to Watch? What is the biggest lesson you have learned?
When APEX Analytix was first named a Provider to Watch, our products were AP Recovery Audit Services and FirstStrike, our AP Controls and Analytics Software. Those products are still important to us and our customers. Last year alone we protected over $5 trillion in spend and recovered or prevented over $3 billion in overpayments (duplicate payments, unrecognized credits and retail merchandise pricing exceptions).
The biggest change in APEX Analytix since then has been the innovations and global implementations of the APEX Portal software and our SmartVM database of validated, accuracy-scored master data records (smart, validated master data — SmartVM). Our Global 2000 clients tell us that our APEX Portal is the first truly fit-for-purpose supplier information management solution on the market, and our SmartVM database delivers a unique and high-confidence master data source for suppliers and customers that is differentiated and of high value.
Our buyer clients had already implemented S2P automation solutions but found those solutions were not working for supplier information management (SIM). The foundations of the S2P networks were transaction processing for high-spend, high-volume suppliers, which is important for e-procurement and e-invoicing initiatives; but every supplier presents a fraud, error or compliance risk. So, together, we created a Supplier Portal solution that fully automates SIM for 100% of suppliers — regardless of country, type and size — that prioritizes data validation to prevent fraud and manage risk, and that enables the buyer’s strategic initiatives. The last key customer requirement was for the APEX Portal to serve as the supplier’s hub for the buyer’s entire S2P ecosystem, through single sign-on, integrated menus, links and data feeds.
In just three years, we have seen broad adoption of the APEX Portal across the Fortune 500/Global 2000 and have surpassed the largest S2P networks in number of suppliers.
What are your two or three best features or services that make you a Provider to Know?
What we hear from customers, suppliers and analysts are three things:
- Confidence in the completeness, accuracy and security of their vendor master data due to highly configurable business rules and best-in-class data validation using our unique SmartVM solutions, that integrate real time to 3650 global data sources as well as our own “golden record” database of 22M+ suppliers to the Global 2000.
- A robust communication hub for the entire vendor base — “Now that they are on the portal, we can point them anywhere.”
- A set of modules, in addition to SIM, that create real financial impact across the supplier base, including headcount reductions, dynamic discounts captured, increased rebates, working capital optimized, overpayments recovered, fines and penalties avoided, and fraud prevented.
How are you thinking about your competitive landscape? How are you differentiating yourself from other Providers to Know in the industry and upstarts on the Watch List?
Enabling open, cross-platform integration of “best-of-breed” solutions is the key to the future. Companies have found they can’t rely on a single, end-to-end solution to do everything well.
We believe there is a huge gap in the S2P solution market around supplier management — specifically, financial controls, fraud and risk. Given our 30-year history engaging suppliers to the Global 2000 using innovative technologies (like machine learning, predictive analytics, robotics and IBM Watson), we believe we are in a unique position to help the world’s largest companies prevent or manage those risks and drive financial outcomes.
We intend to stay focused on providing the best supplier management solution on the market. Paired with SIM, we will continue to introduce advanced program management capabilities, with predictive analytics and AI, to drive strategic programs, like increased discount capture, working capital optimization, fully-automated supplier statement audits, and risk management solutions. Meanwhile, we have intentionally steered clear of transaction processing, which is a crowded market and the forte of other established providers.
Where do you see the procurement sector going in the next several years, and how is your company helping organizations through that?
We see the procurement sector moving in four main areas:
- An explosion of sophisticated fraud (and need for sophisticated fraud controls)
- Continuous change in the regulatory environment
- Demand for greater interoperability, and
- The mobilization of advanced technology.
Over the last year, we have seen a serious uptick in companies looking for a way to defend against sophisticated fraud. Phishing attempts, spoofing and informed insiders are finding ways around manual or weak automated bank account change controls. Even worse, emails from valid email accounts can no longer be trusted, as hackers gain access to the supplier’s email systems. And companies are finding manual controls fall prey to human error, allowing millions of dollars to go out the door to fraudulent bank accounts.
APEX has been in the fraud detection and prevention business since the early 2000s. There is no silver bullet — the key is to continually layer and automate new controls to stay one step ahead of the fraudsters. Three examples of what we are doing today, that we can share, are multi-factor authentication, deep tracking and evaluation of the requestor’s metadata. And we believe we are the only SIM provider that is collaborating with global banks to verify bank account ownership to ensure the supplier actually owns the payee bank account.
Banking regulations, pending data privacy rules in the U.S., and even which countries are in the EU — these are just three examples of compliance requirements that are in constant flux. Some rules apply to IT vendors, others to healthcare providers, others to individuals vs. corporations.
The impact on procurement is a growing need for systems that have global compliance built in, with the flexibility to address every supplier type, and the infrastructure for compliance rules to be continuously updated.
Ten years ago, everyone was looking for that end-to-end source-to-pay solution that was going to do everything. The promise of end-to-end solutions was the interoperability of a fully integrated environment; and, at the time, a single platform was the only way to get there.
Over the last decade, however, the world’s most successful S2P organizations found that model wouldn’t work. No one provider can be great at everything. Over that same period, the world has become more interoperable. Single sign-on, the API economy and cross-platform reporting enablement (e.g., OData) have made a best-of-breed strategy more and more viable.
Today, S2P buyers are no longer content with “also ran” functionality from a single provider. Instead, they demand interoperability and providers who put more value in promoting the buyer’s ecosystem (and the buyer’s supplier relationships) rather than their own.
To that end, we have taken the position (and built a system-agnostic secure/open adapter called apex.soa) that we use to integrate APEX Portal to any other solution in the buyer’s S2P ecosystem (even in real time), to support all of the buyer’s strategic initiatives.
Whether it is IBM Watson, Python, Google Vision or something simpler, like robotic process automation (RPA), new technologies are expanding the scope and increasing the effectiveness of S2P initiatives.
Analytics is in our name, after all, so it is no surprise that APEX has employed predictive analytics to drive outcomes for decades. As newer technologies become available, we are seeing our opportunities accelerating.
- Our Watson Risk Dashboard, with real-time risk scores continuously derived from natural language analysis of 3,000 global news sources, inform sourcing decisions.
- Cash Discount Likelihood scores predict supplier appetite for early payments and fully automate clients’ dynamic discounting programs.
- Auto-decaying trust scores on our “golden records” for 22M+ suppliers to the Fortune 500 / Global 2000 enable fully automated vendor master cleanse, enrichment and continuous monitoring.
- In the APEX Innovation Lab, we are incubating solutions to automate more and more business partner interactions between our customers and their trading partners. IBM Watson chatbots and natural language processing, blockchain authentication technologies, and advanced image recognition are just a few that we see adding huge value to our clients.
Recently, Spend Matters bemoaned the dearth of program management capabilities in supplier portals. In the short term we will provide fully automated program management for more and more strategic initiatives to increase adoption of electronic payments, to improve working capital, enable smarter supplier and customer selection, and prevent more and more advanced fraud and payment errors/discrepancies.
We are extremely excited about the market opportunity in the years ahead — and how we will continue innovating to serve our customers to drive their success first.