Spend Matters, a sourcing and procurement website, is reporting that JPMorganChase is going to shut down its Order-to-Pay (nee Xign) business unit and that clients will need to find another solution at a future date (seems like 2015). It is an slightly unusual, and sad, end to an innovative company.
It is a little unusual because the Xign clients are presumably important JPMC clients and coveted by other e-invoice networks. JPMC is giving their clients extensive transition time, but it is a little surprising that they are not announcing a sale or even a partnership to smooth the transition. Perhaps there is more to the story that we will learn over the coming days. Tradeshift, Ariba, Basware, Tungsten/OB10, Direct Insite, etc. will all be battling over the client base.
Xign was a true innovator in the payment, e-invoice, and dynamic discounting space. They broke many rules, starting with naming the company something clients can pronounce! They had a bunch of really talented people (whom I repeatedly tried, usually unsuccessfully, to poach) and their evolution tells a really interesting story about the EIPP space. (If I err here, I hope some of the ex-Xign readers will weigh in.)
As a remember it, Xign first started out in the payment end of the business. It was a fairly classic check-to-ACH conversion product ala Paymode. It was a nice business, but I’m guessing Xign management realized that there is limited value in check-to-ACH conversion and most of their clients were struggling with much bigger issues before the payment.
From payments, Xign moved “upstream” to offer invoice routing and reconciliation, rounding out their EIPP offering to include the EIP part. After that, at least from my vantage point, they really invented the business of “dynamic discounting” and moved the industry to terms management, which made total sense once the invoice approval was automated and accelerated. That was a great concept and great marketing.
Almost all e-invoice providers have followed the exact same path sooner or later, as they realize the business is not really about the movement of paper, it is about the movement of the approval date and the money. It may be unfair, but folks like Taulia stand on the shoulders of Xign.
Over the years, Xign flirted with adding the obvious next piece, the procurement side of the equation, but they never did pull the trigger, on their own, or under JPMC. From afar, it seemed like JPMC could never figure out what to do with Xign. Dynamic discounting uses the client’s own capital–not the bank’s–so that had limited appeal. Credit card fees are enticing, so lower margin SCF revenue is of limited interest, and banks hate supplier enablement (who doesn’t?). Like the rest of the bank-owned EIPP players it withered slowly.
Xign blazed a trail for many to follow and made some impressive pivots as the market changed. Xign alumni continue to make their mark on the e-invoicing space at a variety of competitors. One of these trailblazers, Jeff Teem, recently passed away. He will be greatly missed. My heart goes out to his family and colleagues.
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