( For Part 1, click here.)
One of the questions asked by some of Spend Radar's channel partners (and customers ) when first hearing of the tool is simple: does the world really need another spend-classification and -analysis product? Aren't there enough already? The answer to this is not as simple as it might seem. Yes, there are far too many products on the market; even the ERP providers have gotten around to finally releasing decent stand-alone offerings that include both the cleansing/classification and analytics bit. But few, if any, new providers tackle classification at the core of their offerings first, delivering a solution focused on simplicity of execution (making the hard stuff look easy), transparency, and flexibility. That is, of course, until Spend Radar launched out of the starting gates at a speed steadily ramping up to a breakneck pace only a few quarters past its incorporation date. But what caused Spend Radar to gain traction so quickly, especially considering that solid, albeit more complicated, solutions (e.g., transactional procurement providers like Coupa) had such a challenge with revenue growth early on?
I think the answer lies in a few key areas. For one, the transparency of Spend Radar's approach is second to none. As with Oracle's spend-classification tool, any analyst can classify spend on their own desktop without shipping it to a low-cost country or relying on a batch-based refresh by a third-party contractor they've never met.
Speed is another reason. With Spend Radar, I've seen very large datasets initially classified in 2-4 weeks versus the 6-12+ week turnaround that is more common (but certainly not always the rule). Moreover, Spend Radar is achieving a level of accuracy that is higher than the norm, guaranteeing 95%, but usually delivering upwards of 99%. All this is well and good, and not terribly differentiating, but what matters most -- in my view as someone who has done spend analysis, category strategy, and sourcing work in the past -- is the ability to classify spend not just to an industry-standard classification but also to a range of taxonomies simultaneously. For example, you can tag a part or item to UNSPCSC or eClass code as well as to a custom-sourcing or ERP taxonomy -- or all three (or more). Some others can do this also, mind you, but I've not seen an execution as slick as Spend Radar's in this regard. Moreover, with Spend Radar, data enrichment is easy, adding new fields on the fly and tagging and rolling up information in new ways (e.g., compliance certification, supply risk information, diversity data, etc.)
What do customers and channel partners like most about this approach? I sense that folks want to get away from black-box models, from both a data-security perspective as well as a perceived need to be in greater control of their own spend destiny. In addition, from a tactical-usage perspective, users like Spend Radar's approach to data collection, which allows organizations the ability to expand different data inputs, sites, and sources without requiring the same formatting extracts. Moreover, users can collect data from numerous sites as it comes in rather than requiring a single-feed approach at the same time. The world works asynchronously; shouldn't data-capture approaches as well?
Spend Radar appears to be headed down a path of continued customer acquisition and growth, in large part due to its channel partners, but also due to a growing direct-sales effort. I reckon that within a few years of launching, it could achieve in revenue what it took numerous other providers in the sector half a decade or more to realize (and in many cases, with venture funding to boot). It will get to this stage in part by continuing to find new customers but also by building out, in its words, a vision focused on category management, tightly linking spend classification, analytics, category strategy development, and ultimately, sourcing (but the actual sourcing execution could be done in any old tool). I look forward to seeing what Spend Radar pulls together in this regard, but more important, I'm excited to see how customers react to it, voting with their dollars for Spend Radar or for competitive products.