Spend Matters Fall 2022 SolutionMap – Analyst observations in Spend Analytics

Twice a year, Spend Matters analysts work hard to further deepen their understanding of procurement tech (and services) solutions at a granular level by analyzing vendor-based RFI requirements across 11 source-to-pay tech categories and reviewing anonymized customer references. The 73 providers that participate in Spend Matters SolutionMap are benchmarked and ranked in this way to give users an accurate update of procurement tech functionality that is data-driven to help them make informed choices about their software partners.

From cycle to cycle (Spring and Fall) and from year to year our analysts observe market conditions, trends and movements among the solution provider community. This might include new entrants to SolutionMap or vendors that started in one solution map category and expanded into another because they grew their offering. All of this gives a more complete picture of the market at every cycle. But it’s not just about changes at scoring level for vendors in a particular field. The observations are also about the scope covered by a vendor and the market.

Our VP research Nick Heinzmann notes some particular market shifts this cycle in Spend Analytics:

Main market shifts this cycle

SolutionMap Spend Analytics welcomed a new entrant this cycle in procurement consultancy firm Efficio.

Efficio takes a tech-first approach, but, importantly, it also has the backing of its consulting services. As a relatively straightforward solution, it’s designed around the basics of classification, getting your spend in order and finding those first-win opportunities. But overall, what makes Efficio really noteworthy is its services/tech combination approach — an approach we’ve seen in a few other spend analytics solutions that have performed relatively well.

Rather like other players, McKinsey Orpheus for example, it offers not just the use of the technology but the whole advisory engagement behind it. There are of course others in this field which do not yet play in SolutionMap, but which we keep on our radar. LogicSource’s OneMarket technology, for example, stands out: it manually cleanses and uploads the data every month, which enhances the tech and makes it very usable.

This consolidation of services and tech is an overall trend we’ve been witnessing for a while, but especially in spend analytics where many organizations realize that the data cleansing and maintenance aspect is very paper-intensive. While technology attempts to close that gap, it is the presence of data experts that really makes the difference, especially with ongoing maintenance and value generation. We hear often that while analytics tools produce good ROI in the first year, picking the low-hanging fruit, it is the ability to understand how to use them in subsequent years that prevents those solutions from becoming shelfware. Having your services partner behind you can make a big difference.

Other market observations year-on-year

Looking back at historical cycles of SolutionMap data and scoring, we observe some general market trends:

Firstly — Of interest in the spend analytics sector in general is the pure adoptability and long-term usability of the solutions. It’s a slow trend, but overtime we’ve seen increasing approaches toward self-service and self-configuration of tools. If we look back over phase one and phase two of this market, we see that the focus has been on heavy tech solutions that require configuration on the back end. Now, we are seeing more of a services aspect, i.e., the teaching of how to use the tech, with more approaches toward adoption and usage. Rosslyn, for example, recently revamped its platform with a deeper emphasis on usability and user interface – a big step forward.

We have also witnessed consolidations in the past year: Onventis and Spendency by way of example. This is interesting because Onventis was born out of a consultancy too. It’s a highly usable tool and has very high customer satisfaction scores.

Of interest in our SolutionMap Analytics for mid and large personas is a strong pull towards the middle (average) of the map in terms of customer ratings, with fewer solutions appearing in the upper right-hand quadrant (value leader). So there appears to be more deliberate movement toward the mean, and in fact, even some of the more powerful solutions, like Rosslyn and Orpheus, don’t necessarily have the highest customer satisfaction SolutionMap ratings. Even suits, like AnyData, Onventis and Spendata, seem to be focusing more on the usability and adoptability aspects – areas that are still being developed in this market.

This is a trend we’ve seen in contract management too, where automating and digitizing legal documents is difficult. There are some aspects of usability that haven’t yet been resolved in this area, like data collection, cleansing and management, which emphasizes the rise in self-service mentioned earlier.

Secondly – We like to think of spend as a crystal that can refract light into different areas of the procurement organization, and over the past year we have seen an increasing ability to use spend data to get to new routes. With a tightening focus on risk and supply chain disruptions, we’ve seen spend become a window into the supply base and how you can plan around it. And with that we’ve seen a lot more focus on geographic breakdown of spend and, of course, on ESG, and within that diversity.

The fact that both Sievo and Simfoni have chosen to be part of our recently launched carbon management module for TechMatch speaks volumes, and we are seeing this focus from other vendors too, like Ignite Procurement.

Clearly there is discrepancy over whether a spend-based method is the right way to address your CO2 reductions, but for some personas and use cases it remains the best immediate tool to use. Watching any vendor that is not traditionally a CO2 expert become one overnight is a fascinating move in our industry. It shows the flexibility of solutions to make insights out of the data they have in a way that hadn’t been thought of until the use case demanded it.

The upshot is that we are starting to see analytics companies think outside the box and beyond spend into risk, ESG and other areas of procurement performance management.

Finally – Worthy of note is that much like with e-procurement, this market is becoming more and more consolidated. There are many small next-gen-type vendors popping up, but if you are in the market as a larger player desiring to buy an analytics provider, there are really very few options. This is a phase of consolidation, with a wave of next-gen offerings emerging that will take time to grow. There’s definitely more work to be done in this area, and the next phase of this market will see something entirely new – so watch this space.

Following are the vendors Spend Matters covers in SolutionMap and Spend Matters PRO in Spend Analytics including new entrants this cycle.

• Look out for the trends we’ve seen in SxM and Sourcing from our analyst Bertrand Maltaverne here.
• Find the trends we’ve seen in P2P from our analyst Xavier Olivera, here.
• And find the trends we’ve seen in CLM from our analyst Nikhil Gaur here.

More information about our full Fall SolutionMap update 2022 can be found here: Spend Matters Fall 2022 SolutionMap and TechMatch rankings for 73 procurement technology solutions 

Find out more about our carbon management component to our buyer decision-making tool, TechMatch, which quickly prioritizes and translates business needs into technical requirements to gain a shortlist of best-fit providers for your organization.