Spend Analytics

Analytics vendors provide data warehouses that bring your spend data into one place and allow you to analyze it.

If you are in the market for better, more actionable spend information, you have many technology choices. The most popular choice is clearly Excel, which is quickest, cheapest, and least powerful. Another popular choice is to build a data warehouse from a data warehouse application like Business Objects and Cognos. We assume that the reader is familiar with both choices and have not covered them in the report.

Yet another choice is to get technology and intellectual property that has been designed to help you solve sourcing problems. All the ERP vendors and the broad-based vendors provide something in this area. In addition, there are three specialist vendors who are worthy of special consideration.

Unfortunately, the problem of providing meaningful analytic information about spend is a highly complex one. One must be able to get transaction information in a reasonable amount of time, harmonize it with other transaction information, insure that the information is clean, accurate, and meaninful, organize it in a way that makes the analysis useful, incorporate other (non-transaction) information, provide an interface that does not deter, allow for simulations, and provide some ability to make analysis replicable and actionable.

Alas, most of the vendors that we have seen do not seem even to have understood the complexities of the problem. It is not sufficient to say, for instance, as most vendors do, that they "integrate" with sources of spend information. By "integration," they simply mean that they have a way of extracting and loading data from another system. But unless the issues of data cleanup, harmonization, refinement, etc., are not addressed, it will be garbage out, garbage in.

The four vendors listed (SAP, SAS, Reputation, and OpenRatings) below seem to have done a bit more than most in these areas. One is a traditional analytics vendor, one is launching its move into sourcing from the platform of analytics, and two do even more. They have figured out to provide actionable data from their analytics.

To get our publicly available information about them, click on the logo. To get the full scoop, contact Rick McLaughlin at (617) 864-9032 or rick@b2banalysts.com.