By now after reading part one of this post, the question on everyone’s mind is what technology / services partner is SAP partnering with or acquiring in the spend analysis area? I've been able to triangulate from multiple sources that their new partner is Analytics, Inc. (rumor is the deal closed a couple of weeks back). Chances are this is a name 75% of the folks reading Spend Matters have never heard of. But Analytics, Inc. has been around nearly as long as mainframe computing (or at least the founder has). I have a lot of respect for what they've done over the years, even if their marketing has left quite a lot to be desired. John Jensen, the founder and CEO of Analytics, inc., goes back to the early GE procurement transformation days with folks like Gary Hare, Orville Bailey, Glen Meakem, Bill Blair and many others. He’s a bit of a godfather of the spend visibility space which brings to mind a favorite movie quote (extra points to those who guess the source without looking it up): "Someday, and that day may never come, I'll call upon you to do a service for me. But, until that day, accept this justice as a gift ..." Well, that gift has finally been cashed in (in Euros, not Deutschmarks).
In recent years, Analytics, Inc. has continued to build its reputation working behind the scenes as a private-label service/product for other vendors and consultancies (including SAP and one of the remaining Big five consultants). While I've heard they've had some direct sales as well, this "best kept" secret to channels kept 'em busy enough to support what was at least a good lifestyle business -- maybe more. One could argue that their best client / channel partner was an educated one -- who knew exactly what they needed (part of which was Jensen's brainpower on the subject given his decades of experience in the area). Given their back-end focus on the data as much as the front-end analysis, Analytics, Inc. could probably best be compared to a much smaller Zycus before they branched out into other areas, although their two approaches to solving the spend data problem were quite different. Analytics, Inc., combined both software and services upfront -- and unabashedly so -- while Zycus took a software-driven route (supported by services where required).
What will SAP bring to market now that they have an end-to-end spend visibility capability in-house? I'd argue we'll probably see a multi-phased approach. Initially, look for SAP to start pushing an integrated capability that makes the most of Analytic, inc's. data extraction, cleansing, normalization and classification approaches (they'll probably toss out Analytics, inc's antique son-of-a-green-screen cube/UI in favor of their own current Flex-based design). This solution will be competitive with that of Ariba, Emptoris, Zycus, BravoSolution, BIQ and others (including Endeca, the latest entrant into the sector, but more on them in a forthcoming post). Rather than read the Forrester Wave on the subject -- which appears more influenced by vendors than pragmatic, real-world use cases -- I'd encourage any practitioners to shortlist all of these providers, and any others they might be considering.
Longer-term, though, I suspect we'll see something that goes beyond simply a "competitive" offering. I suspect SAP has big plans for Business Objects and could use procurement as a key area to highlight what it is capable of. Imagine, for example, combining different spend data elements -- including risk and performance -- into executive dashboards that drill down far beyond the level that such gauges give us today. Regardless of where SAP takes its newfound spend visibility capabilities in the future, one thing is certain today. And that's the fact that SAP is finally a contender in the spend visibility area regardless of whether a customer is running an all SAP environment. Despite what I'm guessing is the relatively small dollar size of the acquisition, this will be a big deal -- one that goes far deeper than UNSPC Level 4 😉 -- if they can get the sales, marketing and product roadmap right.
- Jason Busch