Preamble:

As the doctor wrote on Spend Matters back in November of 2021, shortly after SpendKey‘s initial release, SpendKey was formed in 2020 by a senior team of Procurement and Spend Analysis professionals with experience at big consultancies (Deloitte, E&Y, etc.), big companies (Thomas Cook, Marks and Spencer, etc. ), big banks and Finance Institutions (Barclays, London Stock Exchange, etc.), and Managed Service Providers (Cloudaeon, Zensar Technologies, etc.) who identified a market need for faster, more accurate data processing and better analytics across the board as well as better expert advice and guidance to accompany those analytics to help companies make quick and optimal decisions to get on the right track the first time around.

After less than a year and a half of development, their initial service-based offering was already sufficient for turn-key consultant led projects and their roadmap had them on track for a completely stand-alone SaaS offering by 2023, which they delivered to the market last year.

So where are they now and what do they do? That’s what we’ll dive into in this article.

Introduction:

SpendKey has evolved from a dashboard driven spend analysis solution to a comprehensive spend, contract tracking and decision intelligence platform with a mission to provide deep insight for sourcing and procurement.

SpendKey‘s unique selling proposition is its ability to index every part, product, services and vendor with context. The product ontology and interoperability creates relationships with any attribute; providing end-to-end visibility; and a data foundation for autonomous workflows (on the roadmap), which can currently be used to power a client’s existing stack.

The SpendKey platform supports the creation of customized reports tailored to client-specific requirements. With a wide array of out-of-the-box dynamic dashboards, SpendKey offers standard insights into spend across categories and suppliers. These dashboards are augmented with advanced analysis tools like ABC analysis, trend analysis, Pareto analysis, Inside/Outside evaluations, order-to-actual correlations, and what-if scenarios, delivering a full-spectrum view of spending.

In addition to its customizable options, SpendKey provides a variety of standard reports to analyse spend, costs, goods, services, and information flows. The platform includes pre-defined reports that cover essential areas of spend analysis with customization for every client need.

SpendKey’s reporting suite has been expanded to include contract reports, budgeting reports, and dynamic MIS reports, offering a comprehensive toolkit for monitoring and optimising spend.
These tools were designed by procurement experts with decades of experience in spend analysis, ensuring that organizations can identify opportunities to not only reduce costs but also enhance overall efficiency and profitability.

SpendKey has an advanced spend-intake process that maps all of an organisation’s spend to any taxonomy (which can be theirs, yours, or a hybrid) using a multi-stage hybrid mapping process that uses known mappings, AI, human corrections, and overrides that feedback into the next mapping cycle. Once the client has worked with SpendKey to do the initial spend upload and mapping, the client can subscribe to incremental updates (that will be handled fully by SpendKey) or do self-serve via file-based incremental uploads.

So, if you read the initial analysis, what’s new?

• improved data intake pipeline (which increases auto-mapping completeness and shortens the intake cycle)
• project tracking
• budget approvals
• document analytics (and contract tracking)
• commitments, budgets, and actuals comparison capability
• ability to index parts, products, and services
• line item auditability and more security controls
• more spend sources
• new dashboards

And what hasn’t changed (much)?

• still no DIY (do-it-yourself) report builder
• limited mapping audit access through the front end

And we’ll talk about each of these in turn.

Data Intake Pipeline

The data-intake pipeline is multi-step and works something like this:

1. Upload a raw data file in CSV or Excel or integrate via API

2. Validate the file against column descriptions, data formats, and language requirements (auto-translating to English if required) and apply any necessary transformations and cleansings to create records for classifications.

3. Run the current corpus of mapping rules.

3a. Push the mapped data into the live spend database.

3b. Package the unmapped transactions for web-processing.

4. Extract the supplier, product, and related information and use web-scraping (including Gen-AI models) to extract supplier and line of business information that can be used for classification.

5. Create suggested mappings where there is sufficient confidence for a human to review.

6. Push the verified mappings into the mapping rules and then retrain the machine learning on the new corpus of mapping rules to map the remaining unmapped spend and push through anything with sufficient confidence to the live system, having a human deal with the rest (or push it to an unclassified bucket).

By using multiple techniques, they are able to get to a high accuracy very quickly and turn around the client’s spend cube rather quickly compared to most consultancies using traditional methodologies. For even their largest clients, they are typically live with high mapping accuracy within 10 days.

Project Tracking

When an analyst or buyer identifies a potential savings project, they can record their find/proposal in the tool, get approval, track status, and keep stakeholders informed. All they need to do to define a project (for tracking) is to define the item or category, supplier(s), aggregated spend amount, project period, project type, and expected savings. They can add custom organizational tags or note key stakeholders if required, and then send it off for approval. Once approved, they just have to update the status and savings-to-date on a regular basis until the project is complete.

It’s not meant to be a project management tool, since most of the projects will be sourcing, procurement, contract, or other events or processes managed by other tools, just a tracking tool to track usage of the platform as well as approvals on projects before buyers or analysts go off on their own savings goose chases.

Budget and Forecasting Management

Budgeting and forecasting are pivotal components of financial management that empower businesses to plan, manage resources effectively, and navigate toward strategic goals. SpendKey platform offers advanced budgeting and forecasting tools for the financial year ahead. With predefined templates for easy budget setup, bulk data upload and download capabilities, and the option to assign specific budgets to each supplier.

SpendKey’s budget management module has specific processes for classification and mapping of the budget and spend data, aligning budget allocations with actual spend patterns. It empowers users with advanced budgeting and forecasting functionalities. With comprehensive reports, a user-friendly interface, and the ability to create, manage, and analyse budgets, users can make well-informed financial decisions. SpendKey enables users to optimise their budget allocations, monitor variances, and gain valuable insights for successful investment strategies.

Document Analytics

Spend Under Management is one of the ultimate keys to Procurement success, and this often requires a lot of Spend Under Contract to ensure supply and mitigate risk. This requires understanding the spend under contract, which requires that the contract meta data be stored in the system. As well as contract prices (to track agreed upon to invoiced to paid).

But no one wants to enter meta-data, so they built a machine learning and document analytics application that can automatically parse documents, identify key meta data, extract price tables, and present it to a human for final verification before the data is stored in the system.

The analytics can also be used on POs and invoices for verification purposes, and the user can decide whether or not to store that data in the system (or associated it with contracts).

More Spend Sources

Not only do they now support contract meta-data and contracted prices, but they also support the upload of asset-based data (for an organization to analyze the current and future value of organizational assets), payroll data (since that’s a significant amount of organizational spend), contingent workforce management data (to track services / contingent worker spend), and PO data in addition to AP data (which is the typical data source analyzed by simple “analytics” applications). In addition, if available, they will also load ESG Ranking data.

Their goal is to allow a complete understanding of organizational spend from budget to commitment to ordered to received to paid to projection using both standard cash views as well as amortization, accrual, and projected spend views.

New Dashboards

There are a slew of new dashboards, which include, but are not limited to:

• Incliner/Decliner: highlights suppliers with increased or decreased spend compared to a user defined period
• Contract Overview: provides analytics on different type of contract documents types, their expiry date, contract length
• Contract Details: navigate and review the summary of data for each contract and the ability to view the respective contract
• End-to-End Visibility: connects data from spend, contract, budget and other systems to provide end to end visibility e.g. spend vs budget vs contracted spend
• ESG Summary: provides insights ESG score by suppliers and their relevant spend, including average ESG rating by industry and analytics on performance on each of the E, S and G areas
• ESG Supplier Ranking: provides insights into ESG ranking for each individual supplier
• Budget Overview: provides an overview of budget allocation and spending trends, highlighting key variances between actual spend and budget across different suppliers and categories.
• Budget by Category: shows Budget by Category breakdown, displaying spend, budget, and variances across different levels of categories and suppliers
• Budget by Suppliers: highlights spend, budget, and variance for key suppliers, along with an overall budget variance by category
• Budget Distribution: shows the distribution of spend, budget, and variance across different transaction brackets, along with the corresponding transaction counts
• Budget Detail: details supplier-specific budget, spend, and variance, including non-PO spend and transaction counts
• Supplier Reclassification: allows you to reclassify supplier spend into a different taxonomy
• Supplier Fragmentation: allows you to to track the number of suppliers in any category or subcategory
• Key Insights: presents key spend insights, highlighting potential savings, category spend, new suppliers, and contract renewal dates

Add these to the existing dashboards that include, but are not limited to:

• Main Dashboard : provides an overview of the spend across all categories of spend
• Category Breakdown : enables the user to drill deep into any category and sub-category of spend to get deeper insights
• Contract Kanban View : summarizes contract expiry in a kanban view to help identify contracts and suppliers to prioritise for renegotiations
• MIS Dashboard: provides the user the ability to create their own pivot style report by connecting different data sets to generate views that were not available before
• PO vs Non PO Analysis : provides an overview of spend compliant with purchase orders
• Reseller Insights : provides insights to understand purchase of products from resellers
• Savings Opportunity : provides ability to get a quick high level business case on potential savings based on certain user defined parameters.
• Spend Summary : provides a narrative on the spend
• Spend By Country : provides a summary of spend by different geographies and the ability to drill further by country
• Spend Distribution : provides insights on spend by different transaction brackets to help identify low value low risk spend and suppliers
• Spend Detail : provides view of the raw data and the enrichment from SpendKey to this raw data at the individual transaction level
• Spend by Category : provides insights for each category and the relevant sub-categories based on the defined taxonomy tree
• Supplier Hierarchy : provides insights at supplier level to help understand the parent and all the relevant child entities under that parent
• Supplier Performance : provides a summary on the reduction in supplier count post data cleansing and supplier normalization
• Supplier Segmentation : provides the ability to segment or tag a supplier based on user preferences
• Tail Spend : provides insights and summary into tail spend (bottom 20% to 40% of the spend)
• What-If : gives the user the ability to try different permutations and combinations of parts/products/services to understand potential savings opportunities
• IT OPEX Budget : provides the user with the ability to view budget at supplier level or by category or cost centre, material code, etc.
• Set Budget : provides ability to a user to set and define budget for a user-defined period
• Forex Rate : gives the user option to set the FX rates for various currencies for a defined date range / period to enable the platform to convert all transactions into the base currency based on your company’s defined FX rates
• Key Management : this provides the user with the ability to set distribution keys for spend allocation to business units, departments, functions etc. to help calculate recharge
• Project Tracker : provides the ability to the user to create projects such as savings initiatives and track them in the tool. Also provides a workflow for approval of project milestones such as delivering on your savings targets.
• User Management : allows the administrator to add new users and define their access control

And it’s a fairly extensive offering for an organization looking for a services-oriented solution to give them insights out of the box.

No DIY Report Builder

Now, companies looking for a services-oriented spend analysis solution aren’t looking for DIY initially, but as they mature in spend analysis, they will likely want the ability to modify the dashboards and reports on their own, which is baseline DIY. As they continue to mature, a few organizations will eventually want to start building their own reports and views, so it’s important that DIY is on the roadmap for an organization looking to mature in their analytics capability over time.

Limited Mapping Audit Access through the Front End

In the backend, they keep a complete audit trail of how and why every transaction was mapped where it was mapped. In the front end every single edit and amend that is made by a user is logged, along with supported commentary by the user. However, when a user goes to edit and amend a mapping in the front end, she doesn’t know if a transaction was initially mapped by rule, SpendKey‘s home-grown self-trained AI, or Gen-AI, and whether or not there was ever a human in the loop.

It’s critical that this data be pushed through to the front end because, among other things,

1. there will always be someone who questions a mapping,
2. when that happens, you need to know how it was mapped, and
3. you need to know the ratio of human vs AI mapping in a category for confidence.

As of now, users can reclassify transactions within the tool, so if there is an error, they can push that to the admin or a “parking lot” for review, where, if the admin agrees, it can be pushed straight to the back end.

Showing who, or what, (initially) mapped the data, and why, in the front end is on the roadmap, and hopefully it appears sooner than later.

Summary

All-in-all, SpendKey is definitely a solution you should be looking at if you are a mid-market (plus) in the UK/Western Europe looking for a services-oriented spend analysis solution to help you analyze your spending and come up with strategies to get it under control.