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.
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.
For our first Spend Matters PRO series in 2020, we’re preparing for the future by understanding recent trends. So we’ll look at last year through the lens of category management. Since Spend Matters’ analysts are essentially category managers for the mega supply market of over 1,000 providers that help buy-side practitioners manage their spend, supplies, services and suppliers, we’ll look back at 2019 trends through both the demand-side lens of practitioners/buyers and the supply-side lens of providers. In this analysis, we’ll use:
— Findings from our advisory work with procurement practitioners (and supported by primary research) — Trend analysis of top provider performance taken from our SolutionMap database — from a solution scoring standpoint and also from a customer satisfaction lens — Observations from our M&A due diligence advisory work from our Nexus service offering — Solution development activities from the providers in the market — Insights from service providers in the market who are increasingly themselves developing technology to create hybrid service offerings
Part 1 focused on the practitioner trends of 2019, and Part 2 will review vendor trends in innovation, supplier networks, contingent workforce/services, M&A and other areas where our analyst team has weighed in.
Last month, we examined the current constraints on procurement today and discovered that data spend quality is an issue that’s holding organizations back. Digging in further, we found that spend classification is a big factor affecting organizations’ abilities to get high-quality data. The reality is you don’t know what you’re actually spending in each category. For many procurement teams, getting the insights they need is challenging because classification is painful and time-consuming, and they don’t know how to make things better.
Let’s take a deeper dive into some of the problems with spend classification today:
This week’s SolutionMap Customer Insights report focuses on customer reviews for Vroozi, a provider of spend management, marketplace and invoicing automation solutions. The applicable SolutionMap category for this report is in E-Procurement, Invoice-to-Pay and Procure-to-Pay. SolutionMap Insider members can read about Vroozi in our latest report.
In each Customer Insights report, we provide a one-page summary of details from the SolutionMap peer review process. It includes ratings on how well the vendor meets its customers' expectations, three key differentiators for the vendor and a list of quotes from customers about the vendor’s greatest strengths.
In most businesses, their millions of dollars in leasing spend represent a hidden opportunity for procurement and finance departments to find savings and create strategic value.
With every department in a business juggling leasing terms, financing and renewals for things like warehouses, offices, computers, supplies, furniture and fleets, it’s a daunting task to think any single department could manage it all. These are some reasons why lease spend isn’t managed well. But technology has developed to the point that it would be unthinkable to leave all of that spend unmanaged.
So it's clear that lease spend should be its own category, but why is that becoming apparent now?
Spend Matters welcomes this guest post from Rich Ham, the CEO of Fine Tune, which partners with companies to source, negotiate, manage and audit certain burdensome expense programs.
Procurement, operations and accounting are three disparate parts of organizations that are simply not equipped to efficiently share information and work together so that individual expenses are optimally managed. This fundamental disconnect between them is costing millions and impacting the growth of companies everywhere.
Let's look at the issues and four strategies to help.
Procurement teams globally are facing the same common challenges. We hear it over and over: CPOs are constantly being tasked with cutting costs and doing more with less … yesterday. But how are they doing in actually overcoming these challenges? Let’s take a look.
Today, many procurement organizations are attempting to solve these challenges by turning to robotic process automation (RPA) as a solution. But RPA, while serving as an important automation tool, operates in a regime that accepts current constraints as a given and works within them. It represents an incremental advance in the evolving technology frontier by addressing a subset of procurement domain competently, but it cannot be justifiably elevated to the status of a breakthrough technology.
Xeeva’s patented specialized procurement AI demolishes the resident constraints in procurement by transforming spend data and digitizing domain expertise.
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 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.
Tradeshift is a cloud platform that connects buyers and suppliers with the goal of digitizing supply chain relationships, processes and information, while also enabling everyday procure-to-pay activities. Its capabilities span the buying of goods and services through to financing and payment — and significant capability in between, especially in the invoice-to-pay area.
In addition to providing its own procure-to-pay modules, Tradeshift offers an open integration framework that allows other technology firms (and customers) to integrate and/or development third-party apps, primarily centered on supplier connectivity, transaction enablement and collaboration. Tradeshift can even integrate alternative procure-to-pay providers in cases where specific enabling capability is desired.
This three-part Spend Matters PRO analysis provides an update on Tradeshift capabilities, both as a platform-as-a-service (PaaS) provider and as an e-procurement and invoice-to-pay technology vendor.
The updates since last year's review include information about real-time collaboration; a single sign-on; centralized access to POs, invoices, etc.; an AI-assisted chatbot named Ada; buying topics about GPOs and direct materials; global support; and new sections on payments/trade financing, analytics, services, integration and technology like blockchain.
The PRO analysis is designed to provide facts and expert analysis to help procurement and finance organizations make informed decisions about whether they should consider Tradeshift for both traditional “in-the-box” procure-to-pay requirements as well as unique marketplace/platform-type digital initiatives.
Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Tradeshift as a complement to other procurement and finance solutions. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.
Last week, Spend Matters Europe did a great job of summarizing the Coupa Inspire event in London, including a look at the biggest items that Coupa was pushing on its product agenda.
This was great, but the best product-related announcements weren't in the keynotes, and they barely even got more than a mention in the breakout sessions.
So today, we're going to focus on two developments — connectivity and analytics encapsulation — because these innovations can totally change the game in business spend management and should not be overlooked!
