Rosslyn Analytics' New Twist on Spend Visibility (Part 2)

In the first of this two-part series on the new enterprise spend analysis product from Rosslyn Analytics, I tackled some of its spend visibility basics, such as how does the solution handle data, acquisition/management, enrichment, and basic spend queries. In this second and final part of the series, I’ll focus on what makes this solution stand out from a crowded field of spend analysis players. But before we get into specifics, it's worth restating (as Rosslyn articulated to me to me earlier in the month, and as other competitors in the sector also have told me of late) that the current and recent deal environment has been very strong. My own intelligence confirms this. So what's clear is that the overall pie slice of the spend analysis market is growing at a rate that is significantly above and beyond that of what industry analysts predicted. In fact, I'd wager than in 2010 we could easily see an overall sector CAGR exceeding 25% (potentially 50%, if you factor in some of the new capabilities, services, and content that spend analysis providers are bringing to bear, which don't necessarily fit how we've come to define spend visibility tools in the past). Which brings me to some of the areas that make Rosslyn Analytics jump out from the pack.

Consider, for example, the relative ease with which you can analyze payment-related terms, activities, and strategies with its solution. Rosslyn's toolset allows users to input their cost of capital, interest rates, etc. along with receivables maturity terms (both per individual invoice as well as by vendor, if different) and model various scenarios through impact analyses that might be most advantageous to the business without adversely impacting all of a company’s supplier relationships. For example, based on analyses like these, a company might be able to improve its working-capital situation sufficiently by extending payment terms to only a subset of suppliers that meet a certain set of criteria. Rosslyn also enables users to easily spot any past deviation from agreed-upon payment terms (both early and late payments). Similarly, users may take advantage of Rosslyn's dashboard view of payment data to view the total number of transactions with a given supplier. Using this information, an organization might, for instance, push suppliers who meet a predefined threshold toward a comprehensive e-invoicing approach vs. an offline or scan/capture model. Rosslyn provides this information in both an easily navigable, graphical spreadsheet/pivot table-like environment as well as in straightforward graphical charting. Companies can also set up predefined triggers and alerts based on contract values, existing payment terms, discounts, etc.

Perhaps most interesting and unique, though, are the capabilities that Rosslyn embeds around enabling internal accounting and audit teams to easily search for potential errors or fraud (e.g., spotting duplicate payments). The system and interface for these users can be easily set up to allow them to see only relevant and current information based on what they're looking for vs. having to navigate around in a cube structure or order a report from someone in procurement or IT. Where these non-procurement capabilities and areas of focus really begin to shine, though, are in the global trade/cross-border transaction and tax-reporting areas. Here, Rosslyn can become an integral tool for finance, compliance, internal audit and trade/customs groups to spot savings and reclamation opportunities, potentially even paying for the toolset faster than traditional spend analysis sourcing strategies can.

Using Rosslyn's capabilities in this area, for example, it's possible to look at tax rates for specific transactions. In a fast-moving corporate taxation environment with rapidly changing rates (which has been the story in the UK of late), it's possible to easily spot inconsistencies or inaccuracies in payment information. Seriously, Rosslyn has the potential to become HSM's worst nightmare given the immediate ROI and tax-refund opportunities companies can discover from some quick manipulation and data drilling in this area. I asked Rosslyn to describe the typical savings companies discover in this area, and while there's a range in large organizations, there's at least 5 basis points, on average, of tax overpayment found by such deployments. The big winners? "... often, large multinationals where there [are] a lot of import duties paid between various countries."

In the case of cross-border transactions and related taxes and tariffs, it's possible to extract this information because legally, it must be included at the line-item level of an invoice. What often happens is that the A/P team adds in a value-added tax number but fails to reduce this by the import duty already paid. But using Rosslyn's tool, companies can identify all of the import duties paid, then automatically compare this information to other payments to identify what often amount to material overpayments to tax authorities. This is only one example of the types of analyses and cost-reduction -- or cash-reclamation -- initiatives that Rosslyn enables by letting users easily extract and analyze any type of line-item detail contained at the invoice level and from internal systems.

All in all, Rosslyn Analytics is proving that spend visibility toolsets are not just for procurement users. In fact, some of the largest and most easily implemented savings activities can come from other functional business users interacting with invoice and related systems information. It's also one of the reasons I've put Rosslyn on my radar for 2010 to continue to shake things up in the spend analytics marketplace -- in the UK and potentially far beyond.

- Jason Busch