Suite Silliness
A common refrain from e-commerce and sourcing suite vendors is
that you should buy their spend analysis product because
it's "compatible with" or it "integrates with" the rest of the suite.
Apparently these vendors have failed to notice that
the most aggressive e-commerce suite implementation
ever attempted has only netted 50% of spend through
its portal. Most implementations average less than
20%. This means that the vast majority of spend doesn't flow through the suite at all.
Spend analysis systems have to
accept data from many different and disparate sources.
We must have missed something. How does all that
off-the-books spending "integrate" with the suite?
How do we add all that non-conformant data to the suite's spend analysis system?
The plain truth is, spend analysis systems have to
accept data from many different and disparate sources. After
all, integrating spend from independent sources is where
you'll find a lot of low-hanging fruit.
These sources include p-card systems, separate claims systems
(in the case of insurance companies), and separate
accounting systems (from acquired or merged companies).
There is also data floating around in spreadsheets and
in private data files that is useful to add to the
spend cube, like MWBE notations and the like.
Either a spend analysis system opens its arms to these
different data sources, making it easy to include them,
or it fails to accomplish anything. Its "compatibility"
with a suite is a matter of supreme indifference. The
suite is simply one of many feeds — in most cases a minor
feed — to a system that must widen its scope to be much more comprehensive.
Timing
We'd argue that implementing a sourcing suite is the last
thing you should do, not the first. It's necessary to
understand buying behavior before trying to change it. One could
easily find through a simple spend analysis process that a particular division or department has an
excellent existing deal with a supplier, and instant savings
can be achieved by moving all of the buying from that supplier
onto that favorable deal. It's not at all clear that moving
all that spend through a contentious eRFX process — and forcing the division
with the great deal to do so as well — is the right answer.
Pricing
Some suite vendors use spend analysis as a loss leader
to sell the remainder of the suite. Unfortunately,
they can't sell at BIQ prices even when they price
below cost — and later on they'll make up their loss
in spades with the rest of the software, so they're not
giving away anything.
Pricing aside, the real problem is that every suite vendor under the sun seems
to think that spend analysis is a data warehouse application.
We think that notion is very wrong (see Where's the Analysis?).
