A Spend Radar Update: The Beacon Grows (Part 4)

Please click here for Part 1, Part 2 and Part 3 of this post.

In this installment catching up on the latest from Spend Radar, we'll conclude by analyzing the company's current position in the market. On one level, it would be easy to dismiss Spend Radar as a highly-focused niche vendor with a relatively short (albeit successful) history, selling almost entirely through channels and consultants that in many cases, private label the ultimate solution. In situations like this, Spend Radar serves as essentially a highly efficient software-enabled shared service that empowers others to get results on behalf of organizations and clients for basic spend projects. Yet this picture tells only part of the story, skirting the analytics innovation Spend Radar has brought to the foreground, layering differentiated capabilities on top of a proven core data acquisition, classification, and cleansing platform. Moreover, it's more of a rear-facing view than a forward-looking one. But it's a view that Spend Radar -- and all of us -- must gain more clarity on to understand its future versus the past.

On one hand, Spend Radar does exceptionally well in serving the needs of a range of services providers, many of whom Spend Matters knows and has been in frequent conversations with to gauge how Spend Radar performs (this is a close-knit world, trust me). But serving these customers requires a different mindset than selling direct to organizations where the ultimate focus on solution innovation and usage is just as important as rapid and accurate project delivery. A large consultancy, boutique firm, BPO or exchange cares most about getting things right the first time on a given data analysis whereas an end-customer considering Spend Radar is likely to be more innovative than an organization which has standardized on a broader procurement suite or ERP applications package that includes spend analysis capability. This dichotomy will ultimately prove challenging to nurture because delivering an effective and efficient service while at the same time focusing on continually driving innovation at the core of a software product is no small feat.

Moreover, there's always bound to be some conflict on the channel front with organizations that resell a solution or OEM a tool like Spend Radar who come up against the real-thing competing against their own, private-label toolset – even if specific prospect issues are quickly resolved. It's Spend Matters view that the vendor will need to further refine a go-to-market approach that reduces the possibility of future channel conflict if it is to scale both its direct and indirect sales efforts (not to mention working with the many services and solutions firms it effectively serves today) past a handful of key resources. Still, these are good problems to have, especially for a provider whose technology has taught many seasoned vendors a thing or two about how to not only do spend analysis in a more flexible manner, but also to innovate at the fringes of supplier and spend visibility by leveraging a range of datasets in addition to standard GL, invoicing, T&E, p-card and related standard information sets.

At this stage of its go to market life, Spend Radar's split of business is roughly 25% direct and 75% partner. I suspect in the next couple of years, based on the level of relationships that Spend Radar has been able to develop on the direct front (resulting in significantly more valuable relationships for both the client and the vendor) that we'll see an even greater percent of relationships go direct. But most important of all, innovation-wise, is the importance of being as close to the end user as possible to hear what they're saying about how they could use a tool or a potential feature rather than getting it secondhand from a channel partner or as an afterthought from a consultancy that really just needed a basic dataset cleansed and classified, like yesterday. For this reason, I personally believe that since innovation is so at the core of Spend Radar's new developments, we'll see an increased emphasis on direct customer relationships going forward as future form follows current, effective sale and growth function.

In terms of competition, Spend Radar deserves a spot on the top of any spend analysis shortlist, especially for companies that want to go beyond the basics or value flexibility in classification, data manipulation, etc. For potential spend analysis customers considering a new or replacement capability, we recommend:

  • To evaluate Spend Radar even in the case where broader suites are being considered
  • In competitive comparisons, focus as much on the analytical capabilities of Spend Radar as the data cleansing and classification track record
  • Requesting that Spend Radar create a customized demonstration to show the type of dataset mash-ups that might be useful for a given industry (this will make anyone a smarter spend analysis consumer, alerting them to the true potential of the tool)
  • To ensure that Spend Radar is given adequate time to turn around an initial data load or pilot -- don't require them to go too quickly (e.g., over a weekend), as this could reduce accurate classification levels
  • To engage directly with Spend Radar by providing user input and suggestions (even if you are being sold the product through a channel) if you are interested in helping shape the product roadmap around next generation analytics, reports, etc.
  • To move to more frequent refreshes while adding enrichment data sooner to extend the value, potential, accuracy, usage and reach of spend analysis within your organization

Jason Busch

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