Analytics Content

2020 Predicaments and Predictions in Procurement Analytics: What’s Likely, What’s Revolutionary [PRO]

It shouldn’t be a big shock to learn that procurement analytics is a big deal right now. After procurement organizations have built some basic spend cubes (or “spent cubes”) and dashboards, they’re looking for deeper predictive insights into spend, contracts, suppliers, costs, process improvements, supply risk and other areas. In fact, analytics was by far the most cited technology area expected to have a business impact within the next two years by CPOs surveyed in the recent 2019 Deloitte Global CPO Survey.

The biggest area of interest within analytics have been:

* Self-service analytics/visualization for business stakeholders and procurement staff
* Predictive analytics for power users (e.g., for price/cost/volume forecasting)
* Performance analytics and dashboards (e.g., supplier scorecarding, category dashboards, etc.)
* Support for digital initiatives such as AI/machine learning (which is usually about focused predictive analytics problems), RPA (that either requires some analysis within a process or conversely is about helping to automate the analytic workflows), or big data analytics (e.g., using IoT sensor data from the supply chain)

The Predicaments
However, while analytics are hot, the implementation barriers can be stone cold killers:

* Poor data quality. 40% of CPOs cited the inability to generate insights and analytics because an even greater number (60%) cited poor master data quality, standardization, and governance.
* The master data quality problem is very familiar to practitioners who run any type of analytics that have to do with suppliers, items and contracts — i.e., most of them!
* Some ERP suites and procurement suites have fragmented master data within their product lines, and nearly all these solutions don’t have master data that can be used as part of an MDM-type solution (e.g., having a supplier master that can serve a true SIM solution from an MDM standpoint rather than just creating another vendor master file to add to the heap).
* Generating forward-looking insights based on external data and intelligence rather than just simple spend forensics — especially category-specific insights that are typically built from scratch.
* The struggle to create analytics that go beyond off-the-shelf operational reports from the various modules/tools in the market.
* Dashboards that are attractive, but can be visually overwhelming and not help you prioritize where the key opportunities are.
* IT organizations that may be pushing legacy data warehouses and BI tools that don’t allow more democratized analytics to be developed with an increasingly digitally savvy generation of business users and tools (that might also need to get adopted by an older generation of procurement practitioners). Data visualization and predictive analytics were the top two digital skills prioritized for procurement technology training over the next year.

In the rest of this Spend Matters PRO brief, we’ll dive into the current and future state of the procurement analytics area, and make some predictions about what we expect to see in 2020 from a market standpoint, but also a more detailed technical standpoint.

Afternoon Coffee: Tealbook nets $5 million; Simfoni raises $3 million; GEP lands CITGO; Google Cloud for Lufthansa

Tealbook, a provider of enriched supplier data meant to improve a procurement team’s visibility, announced that it has raised $5 million in a seed plus funding round. Simfoni, a digital solutions provider for spend analytics and buying automation with offices in the UK, Chicago and Dubai, announced that it has raised $3 million in Series A financing. Afternoon Coffee brings you the latest in procurement and supply chain news.

Deploying AI-driven spend analytics: How to prepare your company for increased visibility

Modern spend analytics relies on artificial intelligence for a number of reasons, including the need for a robust tool to manage all of the data being generated and the need for advanced technology to make sense of different data streams. This innovation provides new visibility that can benefit procurement operations and generate business value overall, according to research by Spend Matters and others.

In the first article in this series, we discussed how companies decide if they need a full procurement technology system to understand their spend or if a best-of-breed spend analytics solution offers better insights into the future as well as analyzing past performance.

In today’s post, we’ll look broadly at the tech selection process, specific considerations for spend analytics, and the procurement-focused findings of an A.T. Kearney paper that shows how spend analytics fits within the digital transformation of all businesses.

Spendata: What Makes It Great (Spend and Procurement Analytics SolutionMap Analysis)

Running businesses with an analytical, “data-driven” mindset is the prevailing dogma of modern management experts, yet putting the data and tools in front of everyday business users to make this happen is far from easy. Most people aren’t data scientists, nor are they willing to learn Python, or R, or whatever other technical skill set is out there to DIY their spend analysis beyond what they can do in Excel. But most people do know how to use browser-based web apps, and with a baseline set of analytical skills, they can find some impressive insights in a given set of data — even incomplete or imperfect data — when given the right tools and support structure.

This is what Spendata does for spend analysis. Launched in 2018 by a team of spend analytics veterans, Spendata is a disruptive solution that adopts what we term a “postmodern” view of spend analysis, where practitioners should be able to take action on any data they can get their hands on whenever they can get their hands on it and take immediate action wherever they are. Put simply, it offers real-time analytics directly in the browser that almost anyone can use. And, remarkably, it only costs $699.

These characteristics position Spendata as not only a next-generation competitor in the spend analytics market but also a standout performer for the Nimble persona in our Spend and Procurement Analytics SolutionMap. But where does Spendata stand out most and help “set the bar” in spend analysis, and why should this matter for procurement organizations? Let’s delve into the SolutionMap benchmark to find out where Spendata is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

The evolution of product cost management tools and the state of the art (Part 2): The 2nd revolution

procurement

Spend Matters welcomes this two-part guest post from Eric Hiller, Managing Partner of Hiller Associates, a business performance consultancy specializing in product cost management (PCM).

Our first article in this series looked at product cost management software and how it fits in with the world of procurement software in the earlier years of development. This Part 2 focuses on the second wave of developments in PCM: feature-based automated 3-D CAD costing tools, advanced cost-accounting and control systems; the role of little and big data; and the future of product cost management.

SolutionMap: 59 procurement software companies ranked (Q4 2019 Update)

Spend Matters today released its Q4 2019 SolutionMap, ranking 59 procurement software companies across 12 solution categories, including E-Procurement, Sourcing, Spend Analytics, Supplier Relationship Management, Contract Lifecycle Management and Contingent Workforce & Services. Click on this article to see which new providers joined the rankings this quarter — and to see how to access the rankings for free!

Q4 2019 SolutionMap Release Notes: Sourcing, Spend & Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management and Strategic Procurement Technology Suites

This Spend Matters SolutionMap Insider research note provides insight into the Q4 2019 SolutionMap release for Sourcing, Spend and Procurement Analytics, Supplier Relationship Management & Risk, Contract Lifecycle Management, and Strategic Procurement Technologies Suite SolutionMap areas, reviewing the process we follow and highlighting what has changed since the last release.

Within the individual areas covered in this brief, the following providers have been added to the Q4 2019 release:

— Promena is a new participant in the Sourcing SolutionMap category.
— Spendata is a new participant in the Spend & Procurement Analytics SolutionMap category.
— Vendorful is a new participant in the Sourcing and Supplier Relationship Management (SRM) & Risk SolutionMap categories.

Wax Digital has added a new category to its existing participation this quarter: Contract Lifecycle Management (CLM).

In addition, 31 new or refreshed customer references (and 51 individual map references) were added in the Strategic Procurement Technology areas for Q4 2019.

*Get a first look at the Q4 SolutionMap comparative quadrant graphics here.

The Q4 2019 SolutionMap marks the first time Jaggaer solutions have been evaluated against Q2 2019 RFI requirements by the Spend Matters analyst team, and are able to again appear in this quarter’s editions of the Provider Scoring Summaries.

(SolutionMap Insider members: access the Q4 Provider Scoring Summary reports right here.)

Q4 2019 Spend Analytics: Provider Scoring Summary

Spend Analytics

This SolutionMap analyzes a select group of spend analytics providers. It includes coverage of spend analytics capabilities that encourages subscribers to “peel the onion” beyond cleansing, classification, enrichment and reporting capabilities alone. It is part of our Q4 2019 SolutionMap report series, also featuring sourcing, supplier management contract management, e-procurement and invoice-to-pay providers.

A.T. Kearney: The best use of analytics boosted profits by 83%

Advanced analytics are an indispensable part of doing business in the 21st century, but few businesses are leveraging the full potential of their existing analytics capabilities, with just a fraction achieving the substantial cost savings and profitability improvements that digital transformation and advanced analytics have to offer, according to A.T. Kearney’s “Value of Analytics in 2019” study.

It revealed that just 6% of businesses surveyed have adopted the methods and mindset required to be an analytics leader, including C-suite commitment to an analytics strategy aligned with the broader business strategy, real-time data availability, and an entrenched culture of data-driven decision making. Those organizations saw an increased profitability of up to 83% relative to counterparts who made minimal use of their data and had yet to integrate analytics into their company culture, the study said.

Spend analytics solutions vs P2P: What to look for when your company needs insights

If you’re at a company that’s looking for more insight into its spend, you may be considering a procure-to-pay solution or you may just need to go with a spend analytics tool.

So, how does a business decide between the two?

P2P is often a robust system that a business considers when it needs to upgrade its processes as well as its technology. It’s often deployed when legacy systems need replacing or old workflows take too much time and effort from your staff.

A company choosing this option should be ready for a long implementation process that has costs beyond the hefty price of the system itself. Implementation, change management and staff training take time and money. And hidden costs can include poor user adoption of the system, which cuts into the return on investment if your personnel don’t use the system you just bought.

A spend analytics solution may be a better fit for established businesses that already have serviceable technology and sound workflows. Those companies may just need a system that offers more insight into the data they already have. That’s when you’d look for a best-of-breed spend analytics solution.

Tech selection Q&A: ‘I was like the most hated guy in the office for a while’

Tech selection requires evaluating a lot of procurement software vendors before making a choice, and our coverage typically focuses on the early part of the process to help companies buy a solution that’s the right fit for their needs. But we wanted to talk with a company well after its tech selection to gain insights on the process.

The strategic business enabler Tecom Group and its parent company, Dubai Holding, have gone through two rounds of tech selection to find a spend analytics firm to help them analyze high value transactions, find common spend areas, save money and add visibility for new business strategies.

To find out more about the tech selection process and its results, we did a Q&A with Cory Thwaites, Tecom’s executive director of procurement, about his efforts to bring in a spend analytics firm.

“I was like the most hated guy in the office for a while,” Thwaites said about trying to convince the staff that Tecom needed to know more about its spend.

He said that all changed once his team started seeing the dashboards that showed the actual state of Tecom’s spend.

Orpheus: Vendor Snapshot (Part 3) — SWOT, Competitive Analysis and Summary [PRO]

Spend Analysis. Every company needs it, but not every company knows what they need or how to use it. As per our first post, it could be defined as:

* An extensive set of canned reports across a defined data set
* User Defined Reports and Views on a static ROLAP Cube
* Dynamic Cube Construction and View Creation on a predefined data set
* Dynamic Cube Construction and Federation on an extensible, user-defined data set

Depending on the provider, it may or may not include:

* Data Consolidation and Cleansing
* Data Enrichment
* Data Classification and Categorization
* Data Synchronization with Source Systems

And that’s just the tip of the iceberg on what one has to consider before even inviting a pool of candidates to an RFI, yet alone whittling down to three that all have the core capabilities the organization needs and that can all, more-or-less, be compared apples-to-apples when the RFIs come in.

That’s why in the first part of this three-part series we took our time to define Orpheus and its solutions, including components and capabilities not offered by every spend analysis vendor on the market. Then, in Part 2, we dove deep into the solution, highlighting particular strengths and bringing to light some of the weaknesses compared to peers (which may or may not matter depending on what your organization is looking for). Now, in our third and final part, we will provide a SWOT analysis, a competitive market analysis and a summary with commentary.