When I was at Ariba, we started by automating relatively straightforward business transactions.  The transactions usually involved well-defined goods from catalogs, simple purchase orders, and invoices.  Many items did not even require proof of delivery.  This was an appropriate approach at the dawn of the Internet and B2B Commerce.

Complex Business Transactions

Over the past seven years, I have worked with software companies to automate increasingly complex business transactions.  What makes a transaction complex?  A few variables:

  • Uncertain Quantity at order time.  This issue is common for many services. For, example, a buyer needs snow removal or oil-well drilling and has negotiated a price per hour for the service.   But when the order is placed, neither the buyer nor the supplier knows how many hours the job will take.  Only when the service is delivered is the required quantity known.
  • Uncertain performance.  For many such services, it is hard to verify satisfactory provision of the service.  Many facilities services share this trait. And, for many goods purchases, buyer acceptance requires inspection and/or QA testing.
  • More than two parties to the transaction.  Shipping, as an example, adds a third-party to every transaction. Some transactions also involve inspectors, governmental authorities (duty or tax requirements), insurers, financiers, and others.  These added parties produce documents which must be considered to complete a transaction.
  • Project-based elements.  Involving a life-cycle, parts and labor, deposits, completion or milestone payments, or detailed accounting needs.

Facilities services, ad media, transportation, meetings and events, clinical trials, legal spend, cross-border transactions and many more B2B transactions bring some, or all, of these complexities into play.

Two Really Complex Business Processes

Over the past few weeks, I’ve been learning more about two of the most complicated transactions I’ve ever run into, mortgage origination and equipment leasing.  In both cases, software companies are trying to automate highly complicated transactions in these gigantic markets.

Mortgage Origination

If you have ever bought a home you know how complicated and paper-filled the process is.

Home buying

You have, no doubt, witnessed automation of the front-end of the home-buying process. Companies such as Zillow and Redfin have automated the home search process.   But perhaps you are less aware of the players automating the back-end of the process.  This back-end involves the attributes of complex transactions:  inspectors, appraisers, titles, insurers, financial service providers, regulators, etc.  Companies involved in automating this back-end include:

  • Black Knight (A $1 billion revenue public company in mortgage servicing and origination.)
  • EllieMae (A $360 million revenue public company in mortgage origination.)
  • Blend (A start-up in mortgage origination that has raised $166 million from top venture capitalists.)
  • Roostify (Another start-up in mortgage origination.)
  • ExactBid (A private company automating the appraisal process.)
  • Digital Risk (Seems to be more services than software.)
  • Total Expert (Mortgage marketing software.)

Every time I learn about a new business transaction, or vertical, I find more software companies than I could have ever imagined.  I bet there are plenty more in the $10 trillion mortgage market.

Ellie MaeEquipment Leasing

I’m on the board of a company called LeaseAccelerator.  LeaseAccelerator automates much of the source to settle process for leased equipment (and real estate).  By virtue of my role, I’ve learned how complicated the source to settle process is in this $1 trillion category.  Several factors complicate equipment leasing:

  • An equipment lease transaction often involves an original equipment manufacturer, a reseller, and a financier, as well as the lessee (buyer).  Note the resulting document and money flows in the chart below.
  • An equipment lease is a complex contract with important end-of-term provisions.  These end-of-term provisions often “make or break” the financial attractiveness of the lease.
  • The lease sourcing process requires evaluating the winner based on the present value of the cash flows associated with the purchase (Just that sentence scares a lot of people off!)
  • Finally, new FASB rules that only an accountant can hope to understand must be applied to the lease.

Leased Equipment WorkflowAll of these complexities in accounting, sourcing, contract management, document flows, etc. have created opportunities for automation for LeaseAccelerator.


One of the great joys of being around the B2B commerce market for 25 years is seeing how the technology and organizational readiness have evolved to take on these much tougher spend categories that one day seemed impossible to tackle.  It’s now easy to envision entirely paperless transactions in almost every area in B2B commerce.  This automation will still take a long time, but nothing seems out of the question anymore.

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