My recent post Why don’t Potential Benefits of Spend Analysis Come by Easily? described typical challenges of comprehensive spend management solutions. On one hand, there are difficulties associated with massive spend data acquisition and subsequent classification and enrichment, and on the other hand, with presentation and analysis when done using rigid business intelligence (BI) tools over predefined database schemas. I analyzed some examples of automated spend analysis process improvements via expert systems and search engines, but they might also come with different shortcomings.
I concluded my post with hints of some solutions that leverage dynamic on-demand databases and easy-to-use Google-like analytic tools (dashboards) to overcome many of the challenges that previous generation spend analysis and data classification solutions fail to address.
Enter Spend Radar
Spend Radar is an up-and-coming software technology company based in Chicago, Illinois, US. With currently over 30 employees, Spend Radar focuses solely on conquering the challenges of spend analysis and spend management. The company’s entire goal is to help organizations working with spend- or supplier-related data to take action more quickly and effectively, significantly reducing the time spent to create actionable analysis.
The Spend Radar management team is comprised of proven industry experts hand-picked by the company’s two cofounders. Brian Daniels, CEO, and Rod True, COO, founded the company in early 2009 and the solution has been available to the market since late 2009. Spend Radar’s solution consists of the following two primary modules:
Generally speaking, most customers begin their spend analysis project by providing Spend Radar with their spend data, which the vendor’s experts collect, cleanse, and classify in the aforementioned Data Manager tool. Thereafter, customers are able to use the Reporting & Analysis module to analyze the data.
After a period of 6 to 12 months, customers typically begin using the Data Manager module to manage their data independently. As they become more sophisticated, they might decide to expand into the other more advanced modules to complement their spend analysis.
In other words, the aforementioned two modules make up Spend Radar’s basic spend analysis solution. For a more advanced spend management solution the vendor also offers three more modules. Initially, the majority of the vendor’s spend analysis projects involved those two basic modules, but Spend Radar has recently seen significant interest in its Refresh Manager and Content Manager modules. The Performance Manager module is in a beta release, but based on customer feedback, the vendor anticipates similar growth in sales of that module as well.
Data Manager: Spend Radar’s “Secret Sauce”
The proprietary Data Manager module offers capabilities that Spend Radar’s peers cannot easily deliver. This Software-as-a-Service (SaaS) application is what truly makes Spend Radar able to solve the data challenges of spend analysis. This includes the accuracy of the data cleansing and classification and the tremendous speed of the initial cleansing and classification (and of subsequent refreshes as well).
Data Manager also has the flexibility to collect and cleanse data from disparate sources, in different formats, different languages, and different currencies. This module is the primary reason that three of the world’s largest consulting firms and several sourcing and related technology platforms are now reportedly using Spend Radar as their sole spend management platform.
Because controlling costs is mission-critical to every business, spend management is not restricted to any one industry (or set of industries). For this reason, Spend Radar’s customer profile is tremendously diverse. But what is truly impressive is the speed at which the vendor has amassed its global customer base (of well over 100 corporate logos). The driving force behind this rapid customer acquisition is Spend Radar’s aforementioned proprietary software and next-generation approach.
For example, the vendor has reportedly amassed a similar number of customers in the past 18 months or so as most of its peers have garnered over the past 10-15 years. This success is a clear indication that Spend Radar might be doing something different and right.
The vendor believes that it provides the most value to companies with revenues of over US$2 billion, because it is able to address the complex data and business requirements of these companies. Data Manager is a proprietary tool (built upon an Oracle foundation that is not a data warehouse per se) that leverages automated mapping of parts combined with the ability to manually override/manipulate data mappings. Spend Radar’s teams are thus able to configure and map their customer’s data in a few days, regardless of whether multiple data sources and/or data formats.
Whether Spend Radar is being evaluated for a new spend analysis project or to replace a legacy spend analysis tool that is underperforming, the primary reasons companies select the solution is its speed (weeks rather than months), accuracy, flexibility, and cost (significantly less expensive than the others “per user per year” prices). This is no coincidence since these are also the factors that drive the value and benefit received from spend management.
Moreover, Spend Radar can support data in any language, currency or format, which is a dramatic departure from previous data warehouse-based solutions that cannot accept double-byte (Asian) character sets (DBCS). Although the young company has only been selling its spend management solution to the market for approximately 18 months, it is used by customers on every continent, with tremendous growth recently in both Europe and the US. For more information on the upbeat company, here is a blog post by Jason Busch of the Spend Matters blog.
Touching Base with Spend Radar’s Seasoned Executive
Recently I had a chance to chat with Cindy Barlow, Senior Vice President, Sales and Marketing, who is responsible for building and maintaining Spend Radar’s global presence in the marketplace. She has 20 years of experience in sales and sales management in both large and small enterprises and emerging technologies. Barlow has an extensive history of accomplishments from supply management software companies such as Emptoris, Moai Technologies, and Oracle.
My prodding questions and Barlow’s knowledgeable answers are as follows:
PJ: What were the major highlights of 2010, and what do you expect in 2011 regarding demand for your solutions across different territories and product modules?
CB: In 2010, we were able to build a business that has created a significant shift in the marketplace - both from a messaging and capability perspective. Our customer acquisition rate was unprecedented for this industry, and was global in nature. In 2011, we have expanded further into Europe and Latin America, and have seen a tremendous growth and demand for capabilities that extend beyond traditional spend analysis. We are meeting these requirements with continued innovation, positioning ourselves to remain the innovation leader in this space.
PJ: What were the major highlights and messages from your recent user conference?
CB: We repeatedly hear that customers are tired of the hype that spend analysis (and the related vendors) have promised, but never delivered. Our customers/users have been buzzing about the fact that we are finally delivering on the promise, and extending the value beyond what they initially considered spend analysis to be (i.e., to incorporate full spend management - everything from opportunity assessment to measuring the success of their cost reduction initiatives).
PJ: How are your major system integrator (SI) and other partnerships going?
CB: Initially, our primary strategy was to leverage partner channels for market growth. We have achieved tremendous success with that approach, and have now shifted to target direct sales as well. Partnering is an area in which we feel we excelled extremely well - probably better than any of our peers. It is also the reason for our unprecedented global growth.
While our technology partnerships are a tremendous source of customer acquisition, it is our consulting partnerships that have led to our significant global expansion. We are “the” go-to-market spend management solution for three of the world’s largest consulting firms. They have replaced (globally) the previous spend management solutions they used, with Spend Radar. And what’s even more impressive, is that two of these firms are now in the process of using Spend Radar to manage their internal spend globally. Having been in the space for over a decade, I know first-hand that this is unprecedented. We’re extremely proud that we’ve accomplished this level of trust and success with our partners in such record time.
PJ: What is the breadwinning product and door-opener for Spend Radar? What is selling well?
CB: Although our customers don’t ever necessarily have to use it, our Spend Radar Data Manager is the game-changing “door opener” for our company. It enables us to more rapidly, accurately and cost effectively manage our customer’s spend and related information, and it is the accuracy and relevancy of the data behind the glossy reporting and analysis that is the true power behind effective cost management.
The Data Manager module also gives us the flexibility needed to grow with their business through our additional spend management modules such as Content Manager, Refresh Manager, and Performance Manager. That said, most of our customers rave about the ease of use and performance of our Spend Radar Reporting and Analysis tool. Once they see it, they’re hooked.
PJ: What is your strategy towards social and E2.0 tools and roles-based user experience, and their deployment for your target customers?
CB: Our Spend Radar Performance Manager module offers independent user/role based configurations, combined with full-compliance monitoring by leveraging both internal and external content. The flexible architecture enables incorporation and/or distribution of information through both traditional and cutting edge social media applications. This is what allows us to extend beyond (and bridge) the E2.0 applications with real-world business use and insight, empowering category managers to fully manage and reduce costs.
PJ: What is your mobility strategy? Is mobility important in your software category?
CB: Mobility is a hot buzzword in the industry, which is why Spend Radar supports full mobility. That said, we have found that spend management can (and should) be segmented into two mobility use cases. On the one hand, there are category managers who use the details of the underlying data to make strategic business decisions.
On the other hand, there are management and executive personnel who use the summary information to provide status and reporting against targeted goals. Because of some of the inherent security issues with current mobility applications, we recommend that use of mobility be relegated to the later use case. This ensures that highly sensitive business data is not breached.
PJ: Although you won many new deals in 2010 and 2011, what issues/challenges are still keeping you up at night?
CB: Any successful company understands that their very success is what keeps them up at night. When you are successful, your competitors are gunning for you. So you have to continually find new ways to innovate and remain ahead of your competitors.
We have the fortune of being able to accomplish the success we have with minimal resources (due to the inherent/un-matched capabilities of our Data Manager module), so while we are constantly striving to be a leader, and create the “game-changing” path for our customers, we are also nimble and can manage and adapt to customer feedback and market change quickly. This is something that is difficult for the larger players to accomplish.
PJ: What is your message to companies where spend analysis is not the top pain? In other words, how do you compete with the broader spend management and/or enterprise resource planning (ERP) suite providers?
CB: In the current economic climate, we have not found many companies who are not keenly focused on managing spend. It used to be important, now it’s mission critical. We don’t often find ourselves competing with a “spend management” <OR> “ERP” decision. And because large ERP or full spend management platform deployments are so lengthy and costly, we’ve found that companies are eager to work with us because our solution is extremely rapid to deploy, does not require significant IT resource support, and provides return on investment (ROI) almost immediately. As such, it is much easier for them to sell internally the idea of a fast inexpensive solution that brings value significantly faster (and cheaper) than a behemoth ERP/spend management solution suite.
PJ: Are you at liberty to reveal anything on the company’s future moves, i.e., new functional scope, verticals, etc.?
CB: Although our customer base is not relegated to any particular vertical or set of verticals, we’ve seemed to find that recently we have been acquiring a significant amount of customers in highly complex businesses. For example, the airline, insurance, pharmaceutical, and retail industries all have very complex spend data problems. And we’ve found that we’re uniquely able to meet their requirements.
We also have found that unlike the “one-size-fits-all” approaches of our predecessors, our solution is uniquely capable of handling direct materials spend management. As such, we have gained several customers who are managing this highly business critical information within our platform - whereas previously, they couldn’t find a solution flexible or accurate enough for this data/mission.
Dear readers, what are your views, comments, opinions, etc. about the current economic climate in your region/industry and about your approach to spend management? What are your best practices as well as experiences with particular spend management and analysis applications? If you are a Spend Radar user, I would appreciate hearing about your experiences with the product and the company.