Spend360: The Spend Analysis Classification Vendor to Beat — Year-End Tech Review

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This post is part of our 2016 Year-End Procurement Tech Review series, in which we offer procurement practitioners a bird’s-eye view of some key vendors and their solutions in select categories. This week, we’re highlighting companies in the risk management and spend analytics spaces.

Although Spend360 is a relatively new entrant to the spend analytics solution space in North America, the company is well established in Europe. The firm commenced operations in 2011, and its founders have worked at previous start-ups in the sector. The founding team’s experience is apparent in Spend360’s spend analytics technology, as well as its ability to commercialize its capabilities. Beyond simply enabling the visualization of spending and related supply data, Spend360’s solution sets itself apart from the competition with its emphasis on classification through machine learning.

Quick Facts

  • Founded in 2009
  • Initial solution offering in 2011
  • Headquartered in London, with offices in Seattle and Sydney
  • Senior team is well versed in deep analytics and algorithm development
  • Growing rapidly — added 100 customers in North America over the last two years, with customers in every major vertical
  • Aggregated spend data (a large repository) from suppliers around the globe
  • Multiple partners in the sourcing and consulting space, including KPMG, PwC, Wax Digital and Scanmarket
  • Used by firms such as Capita Procurement Solutions, Proactis and Science Warehouse
  • One of only 22 U.K. organizations to win a coveted "Innovate U.K." grant in 2016

Background & Overview

Since its North American launch, in 2014, Spend360 has added 100 new clients in the region and now counts more than 400 global customers. The company has processed more than $1 trillion in spend, empowering it with a global category-level benchmarking and analytic capability that is competitively distinguished.

The solution’s emphasis on classification through machine learning is a relatively new approach to structuring and cleansing data in a format that procurement (and finance) can actually use. Historically, human-guided classification has delivered a better result. Regardless of how time-consuming and expensive they may be, lower-cost, machine learning-based approaches have not been competitive. Spend360’s use of deep machine learning, however, is now competitive with human accuracy levels (i.e., 98%), meaning it can identify tail spend suppliers, UNSPSC and company-specific categories — even individual items (with the help of knowledge bases that can evolve).

Regardless of how obscure the tail spend suppliers are or how cryptic the organization-specific categories and descriptions are, Spend360 builds the required knowledge base, knowing that it has to do this only once, because after the initial setup and training, the system will learn and evolve on its own, eliminating a significant and ongoing time sink.

Spend360’s competitive landscape is complex with many overlapping providers, of which few specialize only in spend analytics. Other standalone analytics providers include:

Commentary & Summary

Judging by its customer count and its references, Spend360 has quietly emerged as the spend analysis classification vendor to beat. While it has only begun to invest in marketing and brand awareness, it has quietly, both directly and through channel relationships, built a marquee list of accounts. On many levels, Spend360 has replaced Spend Radar as the most frequent independent competitor in the market, which before its acquisition by SciQuest, had also grown rapidly through partnerships and direct sales.

Spend360 is a strong potential threat to not only procurement suite and ERP providers but also to independent solution providers like Rosslyn Analytics. As Spend360 expands in North America, it will be interesting to see how it competes against other fast-growing providers like SpendHQ, as well as other advanced technology firms like Tamr. That is, if it lasts independently for long — independent, fast-growing spend analytics companies have a long history of being acquired.

For a more comprehensive analysis and guide for procurement organizations looking to understand whether they should consider adding the provider to their shortlists for consideration, please head over to the Spend Matters Almanac.

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