Spend Management Gets Smart

Last week, Ketera announced a deal with Hyperion, a leading business intelligence vendor. As David Bush already picked up on E-Sourcing Forum, "This alliance should come as no surprise to those paying attention since Burton Goldfield was formerly in executive management at Hyperion before taking the reins at Ketera. I would be surprised if this was not brewing while he was on his way out the door or on Day 1 in Santa Clara."

In my view, given Burton's past roles selling and positioning BI solutions to financial and corporate executives, there's no doubt he sees the power that such capabilities could bring to procurement. From basic executive dashboards that monitor performance, savings and spend by category and supplier to more advanced capabilities that might take into account commodity risk exposure and comparative organizational performance, the potential for BI to become an integral part of Spend Management is very real.

But unfortunately, I don't think selling these types of integrated solutions is going to be as easy as it should be to the average procurement organization -- at least not in the near future. And that's because the majority of procurement organizations are still struggling to get their arms around such basic information that even the most rudimentary spend visibility and analysis capabilities can enable. Adding a BI layer on top of spend analysis to track and manage additional metrics makes tremendous sense, but until the typical procurement organization has at least basic visibility into spending and performance data company wide, I'd argue that these types of solutions will be of secondary importance.

In addition, procurement is not faced with the same type of burning compliance platform that CFOs and controllers faced with SarbOx (which made Burton's marketing challenge at Hyperion so much easier at the time). I remember a couple of years back when Hyperion's wonderful sign-here "tear-sheet" advertising campaign suggested that those executives who did not have adequate financial controls to enable visibility into performance and operational data might be faced with jail. Despite the sensational side of this marketing campaign, it actually had financial executives tearing out advertisements from CFO and Business week, among other publications, and giving them to IT to go investigate.

Now, I doubt that we'll see the same set of executives get as excited about better visibility into procurement and supply chain intelligence -- despite the potential returns. But regardless, with this announcement Ketera and Hyperion are lighting the path to a level of Spend Management visibility and insight that will ultimately become the industry standard -- most likely a decade or two down the road.

Jason Busch

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