This document discusses the history and challenges of spend analytics and outlines a vision for the next generation, Spend Analytics 3.0. It describes four key challenges that have made spend visibility difficult to achieve: fragmented data across multiple systems, maverick spending outside of procurement processes, inaccurate categorization, and poor data input practices. The document then outlines the evolution of spend analytics from early spreadsheet-based solutions 1.0 to ERP-focused solutions 2.0. It argues that Spend Analytics 3.0 should feature intelligent automation, expert manual intervention, strategic sourcing insights, and an elegant, easy-to-use interface to optimize spend data and provide spend visibility, compliance management, and category management capabilities.

1. Next Generation Spend Analytics
& Data Visualization
Strategies to Move the Needle from Tactical to Strategic
Jake Wojcik
Senior Vice President

2. Age-Old Question
Why is
Spend Visibility
Hard to Achieve?

3. 1. Multiple systems / fragmented data
2. Maverick and unmanaged spend
3. Categorization that IS NOT procurement focused
4. Poor data input discipline
4 Challenges of Spend Visibility

4. Order
Placement
• Limited or out of date
catalogs
• No POs for some spend
• Incomplete entry
by buyers
• Manual edits by buyers or
entry clerks
Supplier
Invoice
• Vague product descriptions
• Lack of detail such as UOM
• Supplier-specific item
numbers
Invoice
Entry &
Payment
• Entry errors, scan errors
• Redundant vendor IDs for
the same supplier
• Accounting-driven
GL coding
• Incomplete or no detail
entered
**The quality of data varies widely by supplier and category.
Data Supply Chain Failure Points

5. The History of
Spend Analytics

6. Spend Analytics 1.0 -- 1980s to 1990s
What created 1.0?
• Rise of modern Strategic Sourcing techniques & computerized business processes
• Suddenly, procurement professionals had a lot of data
Examples of 1.0 solutions:
• VisiCalc, Lotus 1-2-3, Microsoft Excel
Why didn’t 1.0 solutions work?
• Spend analysis was an arduous process
• Time consuming, expensive, and difficult to repeat

7. Spend Analytics 2.0 -- 1990s to 2010s
What created 2.0?
• Strategic Sourcing seeping from the Fortune 500 into the next layer of companies
• Technology companies going through a revolution of their own
Examples of 2.0 solutions:
• ERP systems, P2P systems
Why didn’t 2.0 solutions work?
• Overreliance on technology; no human element
• Solutions built by software executives; not procurement

8. • Categorization is often inaccurate
• Categories do not map to the supply market
• Off-shore vendor categorization teams do not understand the local market
• Data often requires additional manipulation before it is usable
• Tools for spend visibility are often:
 Clunky
 Don’t highlight the insights procurement pros need
 Spreadsheets
Why do 2.0 solutions fail?

9. What should
Spend Analytics 3.0
look like?

10. Spend Analytics 3.0
In our view, the Spend Analytics 3.0 world would look like this:
Intelligent
Automation
Expert
Manual
Intervention
Injection of
Strategic
Sourcing
Elegant,
Easy-to-Use
Interface

11. Spend Data
Optimization
SpendHQ is a spend analysis software
that provides rapid, accurate and detailed
visibility into your spend data. This full-service
SaaS (Software-as-a-Service) spend visibility
solution delivers actionable insight for
sourcing and procurement professionals.
Spend Visibility
& Compliance
Management
Category
Management
Contract
Visibility

12. SpendHQ provides spend visibility & advanced analytics for leading
organizations in excess of $325B in spend annually
Select Private Equity & Holding Company Clients
Manufacturing &
Industrial
Retail &
Consumer Brands
Financial & Business
Services
Life Sciences &
Healthcare
Information Tech &
Media

13. Questions?
Jake Wojcik
Senior Vice President
Insight Sourcing Group & SpendHQ
jwojcik@insightsourcing.com