A few weeks back, over the best Korean fried chicken in Chicago, if not the world, I had the chance to catch up with Brian Daniels and Rod True of Spend Radar. In full disclosure, Spend Radar is not only a sponsor of Spend Matters, but Brian is a personal friend. Still, if I did not think that his organization was doing the right things, I would owe him nothing less than to say so in person, not to mention right here. But fortunately, that's not the case. Spend Radar, in less than a year since its launch, is on spend-classification fire. Without any outside investment -- and initially with offices that consisted of temporary conference space in a hotel -- Spend Radar has had over 40 projects (many of them global) this year and signed up over 10 channel partners. These include many household names in the management-consulting industry, not to mention a number of well-regarded boutiques. Moreover, Spend Radar has comfortably exceeded its first-year revenue plan, which was "in the low 7 figures." This might not sound like much, but for an SaaS vendor just getting off the ground with no outside funding, it's impressive, and represents significantly faster growth than many other providers in the sector.
Spend Radar's raison d'être is to allow companies (or consultancies working on behalf of clients) to rapidly classify large amounts of spend data in ways that are faster and more transparent and flexible than in the past. It also has an analytics platform that plugs into its classification and reporting engine as well. As a stand-alone provider that's willing to work in a targeted yet flexible way in an up-front or behind-the-scenes manner, Spend Radar has been able to slip in, well, under the radar of many large providers with broader suite components who have been unable to penetrate the consultancy-partner channel with even 50% of Spend Radar's success. In fact, if I look at the number of deals coming through the channel in the overall procurement sector at the moment (exempting ERP providers), I'd argue that Spend Radar's channel pipeline is as strong or stronger than those of perennial contenders such as Ariba and Emptoris in the spend-visibility area (if not a number of Spend Management areas combined). If this sounds exceptional for such a small and young provider, it is. But the reasons for it are fairly clear.
For one, Spend Radar has been able to help consultancies and customers directly by allowing them to rapidly cut through the challenge of initial data classification, and to execute rapid refreshes in complex environments. Consider: one of its customers has over 100 ERP deployments and instances capturing information for highly engineered products across nearly 40 operating units worldwide. With other approaches, it might take quarters (or years) to load, cleanse, classify, and manage all of these datasets and interdependencies, given the overall complexity of such an environment (e.g., classifying to both UNSPSC and customer-commodity taxonomies and structures at the same time). Moreover, most provider approaches to tackling such a monster dataset would involve shipping the data out to a global vendor vs. allowing for an in-house expert to do the work onshore if requested.
Clearly, Spend Radar will be one of many spend-analysis providers to watch in 2010. Many are expecting a banner year given a rising trend in large-scale spend-analysis RFIs (a good number coming from companies that have already gone down a more limited spend-analysis path in the past). In fact, over half of Spend Radar's clients are not new to spend analysis; rather, they're picking up with Spend Radar -- and often Spend Radar's consulting partners -- where they left off in the past. All of which is great news for the market given the importance of getting one's spend-data and visibility house in order before moving on to more advanced initiatives, and developing the best possible sourcing and cost-reduction strategies based on a complete view into what's actually being bought.