Andrey Popov/Adobe StockIf data is the new oil, then identifying the reservoirs and shale formations from which to extract prices, benchmarks and other pertinent purchasing information is a critical task for procurement and supply chain organizations. Why? Because the success of any sourcing effort depends on not just identifying the appropriate specifications and suppliers to satisfy a requisition but also on determining accurate market prices, benchmarks, forecasts and supplier capabilities to both strategically and tactically execute.
Yet all too often, sourcing and procurement groups begin drilling blindly. They use last year’s results to benchmark the cost of goods and services, rather than what those purchases should cost when considering all possible options. Most organizations lack a guide for finding the data sources and related tools like analytics and forecasting that can enable a more ambitious approach, as the various companies that can provide some intelligence are often difficult to identify.
Some companies may be trade publishers with access to exclusive data; others may be consulting firms that have moved into the data business, using price and benchmarking information as a foot in the door to upsell advisory services or technology; and still others may be native technology providers that have collected data as part of their normal delivery process than can be repackaged or analyzed to provide valuable insights.
Rather than drill randomly, sourcing and procurement groups need a map of the landscape for category analytics and category intelligence that helps them make smart purchasing decisions.
So we’ve set out to create that map.
In 2019, we began constructing a landscape assessment of firms that provide data/intelligence or tailored technology to support category-based sourcing efforts.
Spend Matters has spoken with more than 50 firms so far that fall outside the usual suspects when considering procurement and supply chain providers — many of which practitioners may not even be generally familiar with. But each of these firms in some way can help organizations deliver new competitive advantage if selected appropriately, and the deeper we get into this nascent “market,” the more we think that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class — or better — performance in the 2020s.
This Spend Matters PRO series introduces the category analytics and intelligence market as we have begun to define it, segmenting providers into subgroupings by category. It includes evaluations of firms in eight initial groupings:
* Direct materials
* Indirect materials
* Cross-category specialists
* Labor and services
* Transportation
* IT
* Marketing
* Software (should-cost solutions)
The solution providers that we identify will be featured in extended Vendor Introductions reviews and will be available as we produce them during 2020 and beyond. Vendors that we already have profiled are linked when mentioned below. Further, we plan to expand and evaluate additional vendors and categories (e.g., warehousing) as we continue our research on this new coverage area.
Today, we begin by defining the sector, sharing an overall segmentation of the market and providing a framework by which to evaluate category analytics and intelligence providers to see if they meet your specific needs.
