Airflip is a new, and unique, offering in the Source-to-Pay+ space that offers what they call “analyze-to-intake” and what is actually a new generation of analytics-backed category intelligence that allows a sourcing team to not only identify categories of opportunity, but identify where that opportunity is and what vendors they should be looking at.
Introduction
Airflip was founded in 2022 to help small Procurement teams in mid-sized Procurement organizations be prepared for their next deal. Billing itself as “vendor intelligence for your next deal“, it provides something that most small Procurement teams desperately need, and don’t even know how much they are missing by not having it.
Before we can dive in, we have to step back and discuss where category management is today and where it’s lacking. Today, category management is typically addressed by services vendors who bring their expertise to help you define a category, understand the market dynamics, put together a sourcing strategy, identify the appropriate suppliers/vendors, put together an RFP, put together a should-cost model, identify the evaluation criteria, and the process for selecting a supplier.
The Category Management solutions out there today are good, but they have their limitations. First of all, it is limited to the categories the services vendor has expertise in. Secondly, it is limited to the categories the buying organization can afford to pay for. (Services are costly, and if it’s a complex category, and requires a month or two of an expert’s time, that’s more than an annual license for a niche best-of-breed module in Source-to-Pay+.) Thirdly, it’s not repeatable by the buying organization the next time the category comes due for sourcing.
A technology solution was needed.
There are a few of those out there, but most of these fall into the categories of:
- Savings Estimators
- (Hybrid Servies-Backed) Sourcing platforms that keep track of identified savings percentages by category (at level 2 or 3 of a vendor standard hierarchy) and/or changes in average market price over time to identify an expected savings range should an organization choose to source the category (at the current time)
- Specialist Category Sourcing Platforms
- which incorporate market intelligence on supply vs demand, price trends, economies of scale by supplier, and logistics/supply chain costs and guide the buyer through a fine-tuned workflow for the current optimal strategy
And, outside of select categories, don’t really help a buyer:
- identify which categories have untapped opportunities
- get insight into current spend and potential opportunity
(based on spend on-vs-off contract, etc.) - identify which vendors they currently source from in those categories
- identify which other vendors they could be sourcing from
- get relevant category-based insight on those vendors
- get insight into how to evaluate the category
- get insight into how to identify the relevant organizational needs, and what should happen before the sourcing event is kicked off
As most of this insight is limited to research reports from category consultancies or expert services providers. What is needed is a combination of the two solutions.
Airflip is one of the first solution providers to create a platform that bridges the capabilities of today’s “savings estimators” and “category insights” platforms with detailed category insight and guidance tailored to the organization’s current spend and supply base.
It does this by combining analytics (for spend insight), select contract meta data (for on vs off-contract insight), category intelligence [research] (gathered from the web and curated 3rd party data sources), and pre-sourcing category guidance [deal management] into one unified platform.
Analytics
Airflip is powered by a modern spend analytics application which allows the cube to be sliced, diced, shaped, and reshaped to your liking. While it only supports one cube (for now), the dynamic spreadsheet-like interface still puts it on par with a top 10 analytics application as a user can easily map and remap transactions and categories, create customized views using filters on any dimension, and drill down into the individual transactions if necessary.
Like every good analytics application, it has a dashboard that displays standard spend breakdowns by department, category, supplier, and cost center. Standard filters are date, thresholds, category, PO, contract, requester/department, payment method, domain, etc.
The standard spreadsheet view is a split view with the category hierarchy on the left and the transactions on the right, displayed in standard row/column spreadsheet format where the rows can be resorted and the columns reordered and hidden. For easy manipulation, the user can bring up a configuration view on the right that allows the columns to be hidden and unhidden and rows to be grouped in any order, based on any arithmetic formula.
One of the more unique capabilities is their semantic spend classification that uses all of the transaction data, their augmented supplier / vendor profiles, and third party data feeds to classify a transaction to level 3, and even level 4, if there is sufficient data, or to a higher level if there isn’t, with high accuracy. (Unlike traditional neural nets which tended to max out at 80% or Gen-AI which tends to max out at 70% or worse.) For example, they can often classify an implementation down to a CPQ software implementation (level 4 under software implementation, under IT Consulting, under Professional Services) vs. web development vs. translation and localization vs. generic implementation services. It’s a level of classification not found in most providers.
Associated with each transaction is a generated vendor overview based on retrieved profile data from the vendor website and any available third party data feeds.
Contracts
As noted above, it’s not a contract management platform — all it can do is integrate with a contract store, suck in all the contracts, process them with semantic AI, extract defined clause types, extract products and services, extract costs and obligations, and use that data to augment transactions and help the user answer questions as to whether or not a contract contains a clause or term.
Right now, it’s a very simple repository where you can sort and filter contracts by supplier. Drilling into a contract brings up the meta-data and key details associated with the contract, and a link to the uploaded pdf.
Research
Their “research” centre provides the category intelligence by subcategory, for example sales/marketing software in back-office software in software. The market research category intelligence provides deep insight into:
- business area (sales acceleration, workforce management, intelligence, quotes, and contracts)
- description
- market leaders
- (sub) categories (engagement, email, dialer, demo management, etc.)
- … and in each (sub-) category, with the right license level,
- the business impact,
- overview
- market details
- key features
- the (sub-) category leaders and organizational suppliers,
- the recommended sourcing strategy
- category risks
- the related categories,
- the relevant evaluation criteria,
- the internal worksheet (for eliciting the necessary information from internal stakeholders)
- a (starting) vendor questionnaire (that can be extended by the customer)
- relevant links
- … and, for each vendor, with the right license level, a research report that specifies
- what the vendor does
- who the solution is for
- why the vendor is different
- the funding the vendor received
- known integrations
- recent product/service launches
- acquisitions the vendor has made
- other key facts on the vendor
In most indirect and services categories, it will be more than enough information to identify the right suppliers to invite to the RFX. For direct, where custom goods are required, it will at least allow a buyer to identify those suppliers who make similar products in the (sub) category and get the buyer close to a short-list.
Deal Management
Deal Management is the final part of the application and provides the pre-sourcing category guidance for the product or service being sourced based upon the built-in category research.
The deal management capability walks the category owner through the business owner requirements, the evaluation workflow steps, the necessary compliance considerations, an evaluation of the business impact, an overview of the alternatives (for comparative baselines and negotiation ammunition), the recommended negotiation strategy, an outline of key steps in the strategy (and progress tracking capability), and the estimated savings potential. It can be configured with all the standard steps to help a junior buyer work through a purchase on their own, or a senior buyer expedite a process while ensuring they don’t miss anything important.
In addition, during the research phase, the application contains survey capability for the buyer to solicit the inputs required from the category or business stakeholders in order to properly plan the sourcing event.
Summary
Airflip is a great solution for mid-market companies looking to get platform-based insight and assistance into their category management. While the depth of insight will vary by category and vendor (as it’s relatively new and development is ongoing on a daily basis), it’s considerably more than the average small Procurement team in a mid-size organization will have access to, and a great foundation for success where the team doesn’t have deep category knowledge or insight across the board. So if you want better sourcing strategy support, consider flipping it to the Success side and inviting Airflip to your category management RFP.