Spend Analysis Musings: Excel Add-In Solvers, Freemium Offerings, and App Marketplaces Pierre Mitchell - August 4, 2014 2:25 AM | Categories: Solution Providers, Spend Analysis | Tags: L1, Technology Spend analysis has been around for decades, formal spend visibility tools have been around for over a decade, and cloud-based products have been available for almost as long. At the same time, the try-before-you-buy approach and “freemium” model that has become popular in many technology areas has especially been popular within spend analysis. In fact, it was about five years ago when Rosslyn Analytics first announced their freemium spend analysis tool Rapid Spend Analytics, which my colleague Jason Busch wrote about here. You can see how this free product relates to the other premium products in this nifty little flow chart. I was a big fan of that announcement, and although I had always said that the spend analysis market was one step away from an Excel solver plug-in, I had hoped that we’d see other providers quickly follow suit so that practitioners could get more quickly engaged and using the tools with their own data sets. Price points for tools like those from BIQ (now Opera Solutions) were pretty low anyway, so why not throw it up in the cloud, let them get started, see their data, and then upgrade to higher-end versions that you could granularly turn on additional functionality for auto-classification, enrichment, custom taxonomy development and analytics, content plug-ins, industry/category extensions, and so on. But, since smart companies tend to test-drive spend analysis products with their own data anyway, perhaps the productization was viewed as a sales gimmick. That said, I still think it’s hugely valuable for business users as much as power procurement users to play around with the data to get them thinking about what they can do with it in their firm. I asked myself: Why isn’t Tableau, Qlik, et al providing some type of environment where third parties (consultants, MSPs/BPOs, content/intelligence providers, small ISV’s, etc.) could build cloud-based spend/supply analytics suites (for more on supply analytics, see here) on top of these high-flying “analytic PaaS” providers? So, I was extremely pleased, and amused, when I stumbled upon the demo site of Qlik, where they in fact had four separate product demonstrations for: Procurement-centric spend analysis AP-focused spend analysis in an SAP environment Expense management Materials management in an SAP environment Some of these areas overlap each other, but it doesn't matter. They are pre-loaded with some existing content, and you can play around with them and adjust the filtering and sorting to your heart’s content. Of course, if you want to use these specific tools at your company you will need to license Qlik to build your own. It’s obviously not rocket science to design some basic spend cubes and serve them up in a straightforward manner in the cloud. But, it still begs the question as to why a provider doesn’t offer something like this in an app marketplace metaphor where you could run something like the Rosslyn Analytics freemium product, but when you’re ready to upgrade to more users and more granular functionality, you are just a click away from the high-powered version of the add-ins that I joked about earlier. In fact, given the SAP examples above, why couldn’t SAP not only serve up a basic version of Ariba Spend Visibility (SAP’s cloud-based solution), or a cloud-based version of SAP Spend Performance Management, on the SAP HANA Cloud Marketplace. It could then then offer the various ‘add-ons’ (D&B enrichment, standard auto-classification to Ariba spend taxnomy, auto-benchmarking of spend, industry taxonomies, dashboard add-ons, etc) natively and with its partners (and even with its customers) to sell via a simple revenue share model. Obviously there are some technical issues to work out, but this is the real B2B network opportunity: creating a network of partners working to build out a PaaS that multiple enterprises and e-marketplaces can use to connect to each other. This is much more scalable than just trying to morph an indirect B2B e-marketplace into something that it’s not, but that is a post for another day. So, do you think spend analysis is a good area to run on a PaaS and associated app marketplace? Do you think bolt-on analytic apps are good modular “add-ins” to scale with enterprises looking for self-funded incremental capabilities? If so, who do you think has the biggest opportunities here? Big PaaS players? Cloud-based analytics firms? BPOs? And for procurement technology application providers, what is your strategy for analytics in the cloud? We’d love to hear your thoughts. In the meantime, Spend Matters Plus has a new 50-part series on developing incremental capabilities on top of basic spend analysis. Yes, 50 parts. I’m calling it “50 Shades of Pay” and hope to show that spend analysis is part of a long-term meaningful relationship between procurement and the business. Related Articles50 Shades of Pay: The Blueprint for the Joy of Spend Analysis50 Shades of Pay: Spend Analysis’s Many Profitable Pleasures Discuss this: Cancel reply Your email address will not be published. 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