We've posted several blogs regarding data cleansing and data classification and I thought it would be a good time to point out some of our most popular, informative posts and group them all in one place.

One of the many Holy Grails of machine learning within the spend analysis domain is the ability to disambiguate and classify customer purchases accurately, quickly, and automatically. It's a fun problem to try to tackle since it's approachable from many different angles.

An announcement was made today that CombineNet and Spend Radar have entered into a partnership that will join two award-winning solutions to provide one best-in-class e-sourcing and spend analysis solution. This announcement comes on the heels of Aberdeen Group's most recent Research Brief Spend Analysis: Adoption for Strategic Sourcing Success that was just released last month.

At Spend Radar, we always help our clients with their analysis of indirect spend. Indirect spend typically shows up as "operating costs" or SG&A (Selling, General and Administrative) costs, while direct spend refers to costs of goods and services that are directly incorporated into a product being manufactured or COGS (Cost of Goods Sold). Procurement teams have traditionally focused on reducing the direct spend, but it is becoming more and more critical for companies to optimize their indirect spend, especially in the current economic downturn. It may significantly affect the bottom line and profit margin.

We were recently featured by the Illinois Technology Association in their Spotlight Series of member companies. As we pondered the answers to their interview questions, what became obvious was that their audience would not be our typical audience of CPOs and CFOs and we would need to take a step back to explain who we are and what we do. When people outside of our industry ask me where I work, I’ve had a few responses of “Oh, do you sell radars?”, but mostly the responses have been “Huh?” For people who are not familiar with corporate spend management I usually follow up with, “Supply chain management, sourcing, budgeting, procurement, spend, that kind of thing” and that seems to help them to understand, but with a written answer to an interview question, that wasn’t going to work. So here is how we responded when asked, “What problem do you solve?”

I recently read this Software Advice blog by Michael Koploy and was reminded of a real world example emulating these 4 practices that he outlines.

A large manufacturing company had very special needs for scorecarding the delivery and quality performance of their key suppliers. What they wanted to do, and what we established for them through our Spend Management software, was as follows:

I was recently communicating with Robert Gleason, Chief Procurement Officer at Commonwealth of Virginia - General Services regarding spend analysis.

He mentioned that spend analysis is too often used for “targets of opportunity” rather than any planned, systematic, and comprehensive methodology and that too often this limited success is considered “good enough” as it provides a large enough ROI (savings, cost reduction, etc.) that deals with opportunities that beg the greatest attention. Such targets of opportunity may include office supplies, MRO, and logistics.

To approve Spend Analysis projects, project sponsors often need to justify to their management why they need to utilize Spend Analysis providers to do the project, as opposed to internal IT resources. Some companies may not have this problem in that they don’t have IT resources available, so it is obvious they need to use outside help. But sometimes there may be conflicts internally. The simple answer to why Spend Analysis providers should be used is that internal IT resources usually do not have the focused experience and knowledge regarding the unique data cleansing and classification needed for Spend Analysis.

In June 2011 Spend Radar was selected as a Red Herring North America 100 Company. This award identifies North American technology companies that have introduced disruptive, game changing technologies within their respective fields. Ever since I entered my first internet-based technology company this was a highly sought after award.  The next stage in this process was to see how Spend Radar compared on the global stage by submitting for the Red Herring Global 100. Because this was our first award submission on a global scale I set my expectations lower for a couple of reasons;

The Problem

How many times have you heard that Spend Analysis is too difficult to use? Your Procurement Department has “power users” or “database gurus” that run the reports. Business units just don’t use it.