Category Intelligence (Indirect) Content

This final PRO installment of Spend Matters’ assessment of category analytics and category intelligence looks at providers focused on IT, marketing and should-cost modeling/analysis.

Accurate intelligence and benchmarks on goods and services are essential to effective sourcing, yet few procurement organizations have comprehensive coverage for all data sources across all categories that they manage. So to help practitioners get a better lay of the category intelligence and analytics landscape, Spend Matters has begun a market scan of technology, data/benchmarking and cost-modeling providers that deliver “category analytics and intelligence” to procurement and other functions. And while few firms in the nascent mega market are perfectly alike, our initial findings have convinced us that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class performance in the 2020s.

This Spend Matters PRO brief provides an introduction to category analytics and intelligence market and an overview of select providers by category. Part 1 of this series defined what exactly the market consists of, potential ways to segment it, and a basic framework for comparing vendors within and across sectors. Part 2 provided an overview of providers in the direct materials, indirect materials and cross-category specialist (direct and indirect) sectors, and Part 3 covered labor/services and transportation. Now for Part 4, let’s examine the providers focused on IT, marketing and should-cost modeling/analysis.

Category specific providers mentioned in this brief include: aPriori, Digital Decisions, Decideware, easyKost, What’s the Price (Buynamics), NPI Financial, Sourceit, 3quotes and Zylo.

Accurate intelligence and benchmarks on goods and services are essential to effective sourcing, yet few procurement organizations have comprehensive coverage for all data sources across all categories that they manage. So to help practitioners get a better lay of the category intelligence and analytics landscape, Spend Matters has begun a market scan of technology, data/benchmarking and cost-modeling providers that deliver “category analytics and intelligence” to procurement and other functions. And while few firms in the nascent mega market are perfectly alike, our initial findings have convinced us that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class performance in the 2020s.

This four-part Spend Matters PRO brief provides an introduction to category analytics and intelligence market and an overview of select providers by category. Part 1 of this series defined what exactly the market consists of, potential ways to segment it, and a basic framework for comparing vendors within and across sectors. Part 2 provided an overview of providers in the direct materials, indirect materials and cross-category specialist (direct and indirect) sectors. This installment (Part 3) covers labor/services and transportation. Part 4 will cover IT, marketing and should-cost solutions.

Category specific providers mentioned in this brief include: Avetta, Bodhala, Chainalytics, Coupa, Brightfield TDX, DAT Solutions, HCM Strategies, Jaggaer, SAP Live Insights, Staffing Industry Analysts (SIA), TenderEasy, Trax Group and Sisense.

Accurate intelligence and benchmarks on goods and services are essential to effective sourcing, yet few procurement organizations have comprehensive coverage for all data sources across all categories that they manage. So to help practitioners get a better lay of the category intelligence and analytics landscape, Spend Matters has begun a market scan of technology, data/benchmarking and cost-modeling providers that deliver “category analytics and intelligence” to procurement and other functions.

Increasingly, we believe these solutions will replace Excel as the sourcing operating system for a broad range of strategic categories. And while few firms in the nascent mega market are perfectly alike, our initial findings have convinced us that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class — or better — performance in the 2020s.

This Spend Matters PRO brief provides an introduction to the category analytics and category intelligence market and an overview of select providers by category. Part 1 of this series defined what exactly the market consists of, potential ways to segment it, and a basic framework for comparing vendors within and across sectors. This installment (Part 2) explores the characteristics, relative maturity and competitive dynamics of providers in the direct materials, indirect materials and cross-category specialist sectors that offer a combination of direct and indirect materials coverage. Parts 3 and 4 will cover labor and services, transportation, IT, marketing and should-cost solutions.

Category-specific providers mentioned in this brief include these: Beroe, Fastmarkets, GEP, ICIS, IHS, Infomine, ION Group, ISG, LeaseAccelerator, MetalMiner, Mintec Global, The Plastics Exchange, The Smart Cube, RTI Global, Logicsource, SourceOne (Corcentric), SDI and ThomasNet.

If data is the new oil, then identifying the reservoirs and shale formations from which to extract prices, benchmarks and other pertinent purchasing information is a critical task for procurement and supply chain organizations. Why? Because the success of any sourcing effort depends on not just identifying the appropriate specifications and suppliers to satisfy a requisition but also on determining accurate market prices, benchmarks, forecasts and supplier capabilities to both strategically and tactically execute.

Yet all too often, sourcing and procurement groups begin drilling blindly. They use last year’s results to benchmark the cost of goods and services, rather than what those purchases should cost when considering all possible options. Most organizations lack a guide for finding the data sources and related tools like analytics and forecasting that can enable a more ambitious approach, as the various companies that can provide some intelligence are often difficult to identify.

Some companies may be trade publishers with access to exclusive data; others may be consulting firms that have moved into the data business, using price and benchmarking information as a foot in the door to upsell advisory services or technology; and still others may be native technology providers that have collected data as part of their normal delivery process than can be repackaged or analyzed to provide valuable insights.

Rather than drill randomly, sourcing and procurement groups need a map of the landscape for category analytics and category intelligence that helps them make smart purchasing decisions.

So we’ve set out to create that map.

In 2019, we began constructing a landscape assessment of firms that provide data/intelligence or tailored technology to support category-based sourcing efforts.

Spend Matters has spoken with more than 50 firms so far that fall outside the usual suspects when considering procurement and supply chain providers — many of which practitioners may not even be generally familiar with. But each of these firms in some way can help organizations deliver new competitive advantage if selected appropriately, and the deeper we get into this nascent “market,” the more we think that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class — or better — performance in the 2020s.

This Spend Matters PRO series introduces the category analytics and intelligence market as we have begun to define it, segmenting providers into subgroupings by category. It includes evaluations of firms in eight initial groupings:

* Direct materials
* Indirect materials
* Cross-category specialists
* Labor and services
* Transportation
* IT
* Marketing
* Software (should-cost solutions)

The solution providers that we identify will be featured in extended Vendor Introductions reviews and will be available as we produce them during 2020 and beyond. Vendors that we already have profiled are linked when mentioned below. Further, we plan to expand and evaluate additional vendors and categories (e.g., warehousing) as we continue our research on this new coverage area.

Today, we begin by defining the sector, sharing an overall segmentation of the market and providing a framework by which to evaluate category analytics and intelligence providers to see if they meet your specific needs.

At SIG’s Global Executive Summit this week in California, two sessions, a mainstage panel and a breakout session, focused on the opportunity for lease sourcing. Two LeaseAccelerator execs — Steve Keifer, VP of Marketing, and Ingemar Lanevi, VP of Global Lease Sourcing Solutions — ran the sessions.

EVERY procurement leader and category manager who has the opportunity to address lease spend should listen to this presentation (and of course finance teams that have oversight over leasing spend as well). Here are some of my notes from the talk and from the slides that Steve shared with me:

Spend Matters welcomes this guest post from Pradeep Chauhan, founder of OnContracting, an online directory of U.S. staffing agencies that helps jobseekers find temporary contract jobs.

Companies’ procurement of contract workers has in recent times become a flashpoint, sometimes tarnishing the pristine reputations of even the most reputable companies. A number of stories in the media have covered reports that some of the best companies are mistreating their contract workers. In damage control mode — and sometimes under pressure from their own employees — companies have responded reactively to these stories, updating their policies and buffing up their legal and audit teams but not after getting a black eye in public.

Why are businesses and contractors facing this now now? And what can companies do to manage it better? In this article, I’ll try answer both of those questions.

Indirect spend often gets overlooked by businesses because the outcomes from buying those goods and services are not the company’s core product, which relies on direct spend. But the potential for lost money and increased risk is so great that businesses must find a way to manage indirect spend.

“The broad reach of indirect spend, coupled with a lack of visibility creates risk, so the key to gaining visibility and managing this risk is to prioritize indirect spend management within an organization and start assessing indirect supplier performance in a formalized way,” said EcoVadis, a risk mitigation provider that offers business sustainability ratings and intelligence.

EcoVadis joined us for a Q&A to explore the next steps to figure out how to identify weak points, prioritize areas to defend against and create a plan for mitigating risks.

Because procurement is so often measured on cost savings as its primary KPI, another essential factor can be left by the wayside: risk. Especially when it comes to corporate social responsibility (CSR) and sustainability, risk remains hidden within indirect spend. To see how these dangers go unaddressed, here are three areas with examples of where organizations miss — but, with proper tools, can address — CSR and sustainability risks for indirect procurement.

Today’s technology enables fine-grained customization and personalization. When applied correctly, personalization can lead to a better customer experience and higher sales or engagement. If applied poorly, it can detract from the user experience, causing frustration and possibly missed sales. In this article, we’ll walk through some of the personalization that can be enabled when using Amazon Business, helping to make it easier to find the right products and better control rogue spending.

If you’re not familiar with it, Amazon Business makes it easy for business customers to find and buy from hundreds of thousands of sellers and helps sellers reach millions of registered business customers around the world. Similar to Amazon.com, buyers search for products from millions of available items. For businesses, personalization helps make the buying experience fast and efficient. From relevant search results to customized messaging, buyers can find the items they need, and know upfront if they are approved for company purchase.

The list of corporate social responsibility (CSR) and sustainability risks in the physical supply chain is long. When securing direct materials, procurement organizations must assess factors from restricted or hazardous substances to the kind of labor that went into raw material extraction and even political restrictions like sanctions on whether companies from certain countries are even allowed to do business with you. Because of these and numerous other potential issues, many companies have begun to focus on identifying and eliminating such risks from their supply chains with the help of third-party CSR data sources and risk-monitoring platforms. But while the value of assessing CSR risks for direct materials spend has gained prominence in recent years, the other side of the procurement coin, indirect spend, has not received nearly as much interest. That’s a shame — and a risk in itself.

For many procurement organizations, catalogs have become the default way to manage indirect spend. It’s easy to see why. Catalogs offer a simple way to manage recurring, low-value purchases. By grouping previously sourced categories and commonly requested items into a single interface, catalogs promise ease of use, efficiency and, of course, increased savings, especially through the reduction of maverick spend. In practice, however, catalogs often create as many new problems as they solve. To help you understand why, here are three reasons why catalogs can’t be trusted to manage low-value spend — and how you can go about protecting your organization.

If expensing that hotel stay or work lunch requires you to keep paper receipts, you are in good company. According to a report from PayStream Advisors, more than a third of employees file expenses either by mailing paper receipts to their AP department or through a combination of scanned receipts and spreadsheets. Nearly two-thirds, however, report that their organizations use a dedicated expense software tool. And as companies move along in their digital transformations, the trend in travel and expense (T&E) management is certainly away from manual systems.