Spend Matters Future 5 2024 – Introducing COVALYZE

Spend Matters honors a vast array of procurement solution providers each year by selecting them for our ‘50 to Know,’ ‘50 to Watch,’ ‘Future 5’ and ‘Hall of Fame’ celebration lists. Discover everything you need to know about these accolades here, including who is on them.

For the Future 5, Spend Matters analysts scour the market to find new specialist solution providers that can answer a burning need of procurement practitioners today. Following months of debate based on extensive knowledge of the many procurement technologies they have demoed, analyzed and benchmarked, they arrive at a list of five young providers that they believe are innovative and exciting, have a rapidly rising presence in the market, can grow sustainably and which every CPO should have on their radar. Read our announcement post here.

These start-ups are taking technology further than most to address problems not previously solved, or are introducing a new category of automation that tackles new challenges in interesting ways. We believe these companies deserve greater visibility, especially in a market which is increasingly consolidating and diluting buyer choices.

Get to know all the procurement tech providers that made our lists this year.

We are delighted to introduce you to our Future 5 as we capture their voices.

Today please get to know COVALYZE

From our recent analyst-written Vendor Analysis:

Here’s why COVALYZE matters:

• To the market — COVALYZE offers deep parts analysis (price/cost-focused) for direct materials using AI to scan historic and customer-specific data.
• To potential buyers — COVALYZE can save category managers and buyers significant time and money, as it takes away many of the manual processes historically required of these roles.

We asked COVALYZE’s co-founder and CEO Christian Haas:

How did COVALYZE come into being?

“It’s a complex story. I spent about 20 years in the management consulting industry, and in 2017, there was a big hype called digitization during which customers and procurement were talking about the impact of technology and digital data. So, I stopped management consulting and focused on data analytics, and we founded a company called Data Engineers, which has since been consolidated into our software company Valunoo in 2020.

“In 2020, we began to focus on solely software development; we also worked with external partners, trying to integrate their software with our software ecosystem and finally launched our Data Connector in 2023. This really is the answer to what our customers were asking of us: ‘I like what you do in analytics, but I have huge problems in getting the data right.’ We would always tell them to hire some students or an assistant to upload it, but that didn’t work. Only since we have this end-to-end solution that optimized data input did customers gain the confidence in the developed data pipeline and the quality of the data. From that foundation of quality data, we could proceed with deep data analysis.” 

What are COVALYZE’s greatest strengths?

“COVALYZE integrates two functions of our customers that are classical data silos: the engineers and the procurement professionals. The engineers write up their specifications and send it to procurement; procurement sends it out, gets the quote back from suppliers and returns it to the engineers. It’s not one loop, though. It’s a continuous loop for one part, and there are always questions because suppliers do not always understand the specifications. 

“So, just getting a target price for a single simple specification can take weeks, and what we do is reduce that time at the touvh of a bottom. We use data and AI to learn from a customer’s historic spend data and upload all the drawings they produced in the past so that when they enter the specification of a new drawing, we can quickly estimate a target price for the new design. We’re combining engineering data and procurement.

“Other solutions analyze invoices, but those documents tend to be easier because they lack the technical specification of engineering products. You need experts in reading engineering data — or at least some history of reading it — to be able to look at a drawing of a part and understand each part’s technical parameters. We have that category specific label sets in our Data Connector and know which kind of data you need to extract out of the different drawings. 

“That’s basically what our Data Connector does. We teamed up with a German company with an OCR system that was used for invoice recording, and we adapted their software to our technical document needs. It’s our knowledge that we use on this software that delivers value.”

What is the road ahead for COVALYZE? 

“The next step in our plan is an even higher automation in data interpretation and visualization. More than just target price calculation, we want to automate the steps after a data set is uploaded, all the steps in analyzing what we call develop or demand management. That way, you can focus on developing a relationship with the best suppliers in certain technologies or if you have to change suppliers, you focus on finding the most competitive supplier within a specific manufacturing process.

“We want to help customers that find deep analytics too complicated. Essentially, we want to develop a dashboard that goes over a data set and clearly tells you where your savings are and walks you through the different levers in supplier negotiation. For example, if you imagine the data like a consultant, you hire a senior consultant who’s experienced in sheet metal manufacturing, and this person tells you there is potential here but that you only have two suppliers and need to develop more. Perhaps if you renegotiate with one you could save 10K. For that, we want a partner already experienced in RFQs and RFPs — just as we adapted from OCR technology.”

What does it mean to be named a Future 5?

“It’s definitely an honor to be named a Spend Matters Future 5. We are a company of seven people, we don’t invest a lot in marketing and our customers keep us busy. So this is indeed a step in a very good direction for us.”

Read about why our analysts chose COVALYZE here.

Many thanks to COVALYZE for sharing its story with us. We hope the Future 5 broadens our readers’ perception of the art of the possible to help you position your organization for the challenges ahead.

On October 31, the Spend Matters Analyst Team recorded a webinar covering the methodology behind our analysts’ decisions on all the lists this year.