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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?).