Even though I can think of a million ways to divide the time in my day between different initiatives, the area that's been capturing the highest amount of my attention recently falls into the research arena. Indeed, Spend Matters Compass, our new research offering, is helping establish Spend Matters as more than just a blog or research site -- we're becoming a new type of analyst research house in our own right. In fact, I spent part of the weekend looking at the editorial calendars of other analyst and advisory shops and realized our comparative research agenda was even more ambitious than I realized. Alas, we'll see how much of it we get to by the end of the year, but already, just a few weeks into the program, we will have launched four separate research briefs. This week we're announcing the availability of the third research brief in Compass Series 1 on services procurement, as well as the initial brief for Compass Series 2, a collection of research labeled: Spend Visibility and Beyond -- Analytics Broader Role in Procurement, Risk Management and the Supply Chain (for the high-level planned research calendar for the year, please click here).

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I've been asked on more than a half-dozen occasions to spend a day with clients (both practitioners and vendors/services providers) to provide my view of the rapidly unfolding spend analysis landscape, discussing a diversity of approaches to identifying savings opportunities and reducing supply risk. The most recent extensions of my research in this area -- most of which I've not featured on Spend Matters, but which I plan to share in two upcoming Compass Series on the subject -- focus on the intersection of spend visibility, supply risk management, and supplier information management. I'll go many layers deeper than Purchasing's recent effort to look at the space.

An increasing number of companies also use spend visibility as a means to support other initiatives, including supplier diversity reporting, rather than have individuals and small groups tackle these processes independently through different platforms. (The exception to this is in the case of multi-tier reporting requirements, which few spend analysis platforms support without significant customization). If we look at spend analysis independently today, what is the best way to segment the landscape and the various providers within it? Whom should companies shortlist?

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Punxsutawney Phil saw his shadow on February 2nd; looks like six more weeks of winter. It has come to my attention, however, that his predictions have been right only 37% of the time. Born and raised in Lancaster County, Pennsylvania, I was more attuned to the predictions of rival groundhog Octorara Orphie, from the Slumbering Groundhog Lodge of Quarryville, PA, founded 102 years ago. This year Orphie predicted an early spring, as did a number of other woodchuck prognosticators. As they say, there are lies, damned lies, and predictive groundhog analytics. (By the way, if you're interested in joining the Quarryville Slumbering Groundhog Lodge, you must be at least 35, as Slumbering Groundhogs must all be old enough to be President of the United States.)

With groundhogs demonstrating so many occasions of predictive inaccuracy, perhaps the KPI for the arrival of spring needs to be based upon more robust data. Since Punxsutawney Phil is correct only a little more than one third of the time, maybe the performance measure needs to be defined more clearly; in any case, how can you base the prediction of such an important event on the shadow of a rodent soothsayer? Besides, if you apply Six Sigma tools, you may find that there is too much variation in the conditions outside Phil's burrow. Or, Phil himself probably needs a Gage R&R (gage repeatability and reproducibility) to ensure that his measurement system will produce reliable results. Perhaps Punxsutawney Phil needs to be replaced, possibly by automation, as suggested by PETA, who would prefer a cruelty-free robotic groundhog. But KPIs should be based upon an organization's own goals, not on those of other organizations, such as PETA.

Now that we have some baseline data on Phil, we can begin to set some targets for improvement. We probably need to put in place some performance-improvement incentives, or a "carrot" approach, if you will. I'm not sure whether groundhogs eat carrots, but they do like sticks, suggesting the "stick" approach instead. If performance incentives do not prove effective, we should consider outsourcing Phil's job to lower-cost counties in Pennsylvania, or following through on the automation threat. It's a global economy, and predicting spring does not need to be performed by high-priced local rodents and their fancy top-hatted protégés.

As I started to dig into the vendor management system (VMS) platform sector for the first time, I quickly spotted a pattern among providers: When asked what it considered its differentiator, every single one responded: "our analytics." Now, as a somewhat educated outsider peering into the space for the first time, I thought this seemed straightforward enough. The structural nature of most unmanaged and distributed contingent workforces inside many organizations makes it very difficult to effect savings and improvement without a baseline from which to measure. In other words, simply gaining visibility into the types of labor you contract and the process by which you manage them is often a significant step, a big win in and of itself. Given this, it's not surprising that providers would prioritize analytics and the benefits of reporting on even the most basic information.

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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.

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( For Part 1, click here.)

One of the questions asked by some of Spend Radar's channel partners (and customers ) when first hearing of the tool is simple: does the world really need another spend-classification and -analysis product? Aren't there enough already? The answer to this is not as simple as it might seem. Yes, there are far too many products on the market; even the ERP providers have gotten around to finally releasing decent stand-alone offerings that include both the cleansing/classification and analytics bit. But few, if any, new providers tackle classification at the core of their offerings first, delivering a solution focused on simplicity of execution (making the hard stuff look easy), transparency, and flexibility. That is, of course, until Spend Radar launched out of the starting gates at a speed steadily ramping up to a breakneck pace only a few quarters past its incorporation date. But what caused Spend Radar to gain traction so quickly, especially considering that solid, albeit more complicated, solutions (e.g., transactional procurement providers like Coupa) had such a challenge with revenue growth early on?

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While I plan, over the holiday break, to find as many ways as possible to ignore numbers, charts, graphics, and useful and creative quantitative displays of visual information in general, there was a time earlier in the month when, although overloaded with ideas and information and most in need of a refresh, I still could say "wow" when I saw something exciting. That moment happened during a demonstration of Rosslyn Analytics’ enterprise spend analysis product. Now, I know what you're thinking: How could yet another spend analysis product cause such excitement, both in the heart and in the head? Haven't we already done analytics three ways to Sunday, and didn't Spend Radar and others already come up with a better mousetrap around classification? The answer, of course, is yes. But what makes Rossyln different is not just some of the capabilities of the application ( which are certainly more broad than deep, relative to some other offerings); it's the fundamental assumption behind what the role of spend visibility should be, and who, within an organization, should benefit from it. ( Hint: it's not just procurement anymore.)

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A few weeks back, over the best Korean fried chicken in Chicago, if not the world, I had the chance to catch up with Brian Daniels and Rod True of Spend Radar. In full disclosure, Spend Radar is not only a sponsor of Spend Matters, but Brian is a personal friend. Still, if I did not think that his organization was doing the right things, I would owe him nothing less than to say so in person, not to mention right here. But fortunately, that's not the case. Spend Radar, in less than a year since its launch, is on spend-classification fire. Without any outside investment -- and initially with offices that consisted of temporary conference space in a hotel -- Spend Radar has had over 40 projects (many of them global) this year and signed up over 10 channel partners. These include many household names in the management-consulting industry, not to mention a number of well-regarded boutiques. Moreover, Spend Radar has comfortably exceeded its first-year revenue plan, which was "in the low 7 figures." This might not sound like much, but for an SaaS vendor just getting off the ground with no outside funding, it's impressive, and represents significantly faster growth than many other providers in the sector.

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Earlier this morning, Aravo announced a $27 million funding round led by Cisco. While you can read the details of the funding round in the above-linked Spend Matters column -- along with some thoughts from the transaction's lead engineer, Aravo's CEO Tim Albinson -- I thought I'd take a few minutes in this post to share my analysis of what the funding round means for this sector. Perhaps most interesting on a superficial level is how with this round, Aravo appears to be migrating away from their supplier information management (SIM) positioning to what they describe as a broader approach to supplier collaboration that encompasses basic vendor management and vendor information management. Of course they summarize this in a three letter acronym -- it must always be three letters, mustn't it -- as enterprise supplier collaboration. Or ESC for short. While this may have a certain branding ring to it, I'm not so sure that moving away from the concept of managing supplier information and leading with the notion of collaboration is the right approach in selling what Aravo does for procurement organizations.

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Earlier this fall Rosslyn Analytics, a UK-based provider of spend-analysis software and solutions, announced that it would deliver what I believe to be the first free spend-analysis platform in the market. I’ve had the chance to use the tool during the past couple of weeks, and I’ll be sharing a number of observations in this post and in a follow-up later this week. To begin with, it’s worth noting that with “free” come conditions and/or limitations, for sure. In the case of Rosslyn Analytics' RA.Pid®, “free” entails foregoing a number of central capabilities that nearly all other spend-analysis tools include, such as the ability to easily classify spend to taxonomies and validate/enrich spending data as necessary with third-party information (e.g., parent/child, diversity and risk information, etc.). In other words, what you upload to the free SaaS-based application is essentially what you get (think of it as a kinder, gentler web-based Access-like tool specific to a limited set of spend-analysis queries).

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