Purchasing Gets it Wrong Again: Spend Analysis IS Cheap.

A recent article in Purchasing on what $100K buys in spend analysis software has me jumping up and down again (their 2007 article on the ABCs of Spend Analysis, which was beautifully dissected by Eric Strovink in What Purchasing.com Got Wrong, had me fuming for weeks). According to this new article, being able to analyze spend is critical (which it is), but it isn’t cheap and price tags start at $100K — and buyers may have to pay more for insight into new opportunities for sourcing and consolidation. WTF?!?!?!

Allow me to say that again. What the frack? It is cheap! Pricing starts at $36K/year for the most powerful spend analysis tool on the market. That’s significantly less than the $100K price tag they list. $64,000 less. (I guess that’s the real $64,000 question!) A one year single user license for BIQ is only $36,000. It includes unlimited utilization by your senior analyst and all of the new features described in their last press release, including nodal and transactional computed measures, dynamic referencer filters, a super-fast 64-bit loader, and the ability to drill-down on 50M transactions in real-time on your laptop. (You might need a quadcore with 16 GB of memory for that size dataset, but those are pretty cheap these days.) And, you can get a 100 user license for much less than $100K/year, even if you pay by the month with the option to quit at any time.

As usual, it’s obvious that Purchasing.com’s research consisted of a simple web search, product description screen-scrapes, and a quick call for pricing, as opposed to the in-depth web demos that I insist on before Sourcing Innovation will even acknowledge that a product exists. And the results are dismal. While Ariba, Bravo, CVM, Etesisus, Global e-Procure, Ketera, SAP, and Zycus all have spend analysis solutions, they are not equal. Iasta’s is actually built on third parties (BIQ and Spend Radar), FieldGlass is limited to services, Insight is a services organization which, to the best of my knowledge, still uses third party tools, and I’m sure big players like Emptoris (which just announced faster reloads and data warehouse restructuring time) and new SaaS players like Rosslyn Analtics (which are trying to take a cloud-based approach) are sure to be annoyed at being wholly (and unaccountably) ignored.

You’re better off starting with a Google search and visiting individual vendor sites than reading this article.

Once again.

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