Even though Spend Radar started out selling entirely through channel partners, today, roughly a quarter of their business is coming from direct sales. And the revenue they attribute to direct deals is increasing, owing to the fact we previously noted in the first installment of this post that direct deals tend to involve multi-year relationships vs. transactional, one-time (or episodic) spend snapshots to enable basic sourcing strategies.
Without question, the area that Spend Radar has enhanced the most in the past twelve months is its reporting interface and dashboard. The centerpiece of the user experience is a landing page showing a portfolio view of a company's spend with the ability to drill down -- or to "hone in", pun intended -- on underlying information. For example, a senior executive in an organization or the individual with overall spend data stewardship responsibility can look at spend by operating unit (or portfolio organization, in the case of PE firms and holding companies).
Additional information is now readily at one's fingertips as well. For example, users can configure meters that show percentage of rogue spend (i.e., spend that is not going to preferred providers in a given category), percentage of spend with high-risk suppliers (based on third-party enrichment), diversity spend and percentage of off-contract spend. Other information available on the first page in a typical configuration may include spend by major category (e.g., logistics, MRO, telecom) and spend per parent company (i.e., largest suppliers based on parent/child relationships).
From the home dashboard, users may opt to quickly drill down on spend details based on overall commodity classification structure (e.g., UNSPSC, NAICS, custom taxonomies), supplier groups, item descriptions, categories (and sub categories), spend segments (e.g., family, class, commodity), regions, cost centers, BUs, data sources, GL codes, facilities/plants, etc. But where Spend Radar really begins to differentiate on the reporting side is not just based on the granularity and flexibility of the reporting tool, but on how users actually work with and visualize information.
In this regard, the "green, yellow, red" construct that appears in various meters can be mirrored in different areas a user may opt to drill into. For example, one view may show that the underlying commodities that comprise a given item or component are moving in certain directions (and by certain percentages) based on the color of the box they're contained in. In this case, green might suggest minimal or now change while yellow and red would dictate a shift in commodity prices impacting spend beyond certain user-configurable thresholds.
In addition to displaying commodity price point and trending information in the context of spending and supplier data, Spend Radar has spent quite a bit of time on the data enrichment front as well in recent quarters. They have partnerships with both D&B and CVM Solutions to provide spend enrichment data. Spend Radar put quite a bit of time into thinking through the key elements necessary within data enrichment to keep the costs down for enrichment, paring down the overall list with D&B, for example, to 35-40 core enrichment attributes. Still, users can get specific information on the financial risk a supplier may pose on both an aggregate (e.g., overall spend with supplier posing high risks, medium risks or low risk) but also on a specific basis, alerting users to at-risk line items based on supplier profiles plus showing relative risk based on a specific profile view of a vendor.
Today, Spend Radar suggests that only 10% of their customers start with enrichment data (e.g., risk, diversity) as part of their initial spend analysis deployment. Yet 30-35% want it quoted upfront, and plan to include it at a later stage. Spend Matters research suggests that an increasing number of companies are buying supplier enrichment data, either as a component of spend analysis or supplier management suites. Because of this, we suspect that the number of Spend Radar customers licensing enrichment data both initially and at later stages of deployment will climb.
Stay tuned as our analysis of Spend Radar continues.