Spend Radar remains self-funded (with no outside investment) and is profitable, which isn't something you usually see in a software company growing at over 100% each year in revenue bookings. Yet innovation -- and pushing the limits of data analysis around spend, suppliers and commodities -- remains at the core of what the vendor is about. In this multi-part post update on their recent progress and solution enhancements, we'll examine some of the solution innovations they've been working on. But first, it's worth examining their evolving business model and what's changed at the upstart Chicago spend analysis provider. For one, Spend Radar continues to focus on channel enablement (with a range of large consultancies, boutique firms and BPOs) as well as direct sales, including the addition of new offices in Texas and Latin America.
Spend Radar shared with Spend Matters their "shift in the business model" that started with the addition of a "direct sales effort" in 2010, leading to longer-term customer relationships and multi-year deals versus the more transactional work that comes with working primarily with consultancies. Moreover, Spend Radar is driving additional penetration in current accounts, in some cases selling 200-300 reporting licenses in a single deal (this is representative of the fact that spend analysis tools are now being used on the analytics and reporting side by increasingly larger numbers of customers). On the operational side, Spend Radar has reduced the turnaround time from 10-12 weeks for many projects (where they take on data acquisition, data cleansing and data classification) to 3-4 weeks.
We've recently done our own checks of Spend Radar customers and have found that in general, the organization under promises and over delivers. We also asked Spend Radar about how they handled the increasing potential for channel conflict and it appears they have a system to deal with it, although our own discussions with some Spend Radar partners suggests this is as much a work in progress given the rapid growth and adoption of their solutions (whether sold directly or through channels). Stay tuned for more detail on this. In addition, the vendor has not been without growing pains, scaling-wise, in a handful of accounts we've spoken with. But when reasonable timing expectations have been set with users even for massive numbers of line items (for initial spend snapshots), Spend Radar typically gets results that more than satisfy. The only "direct" customer we spoke with (i.e., a customer who bought Spend Radar without going through a channel partner) told Spend Matters that their data set was so large, it initially took Spend Radar a number of days to configure the necessary hardware and infrastructure. But once they did, it was smooth spend sailing.
For their solution, Spend Radar still blends services with software. Even in cases where customers like to tune their Spend Radar environment (e.g., looking at spend by different taxonomies, classifications), the company usually provides the heavy lifting behind the scenes from a refresh standpoint. On the software side, Spend Radar is selling an increased number of modules, but much of the innovation comes in the form of configuring customized deployments tracking internal and external data sources alongside company spend data. For example, organizations might opt to leverage Spend Radar to track logistics safety information from the Department of Transportation, commodity information tied to price indexes for contracts and KPI data (e.g., quality data, on-time performance, service level agreements).
Stay tuned as our analysis of Spend Radar continues, looking specifically at some of the solution enhancements the vendor has made.