According to THE PROPHET, the reason that we’ve never seen a breakout $100M+ pure-play (spend) analytics vendor is it’s complicated. (Source: LinkedIn)
But the reality is that it’s really not.
First of all, approximately one third of all multi-nationals are headquartered in the US. In other words, one third of global enterprise is based out of the US, where the strategic decisions are made. Let’s say that again, one third!
Secondly, and this is the real explanation, in our age of participation trophies and only focusing on the positive (when there really isn’t any), no one is willing to state the truth, and that is most of the employees responsible for strategic [spend] analysis are just too math stupid.
Analytics, at its core, requires good mathematics skills and, with traditional analytics applications, good computer skills.
However, the US, where many multi-nationals are based, consistently ranks in the lower part of the OECD international rankings and is currently 34th in the PISA [out of 79 scored countries] (with an average numeracy score of 249, below the TOTAL OECD average of 263, with over 1/3 of its adult population at level 1! This means they can’t even do basic arithmetic and problem solving [or calculate a tip FFS, but that does explain why they believed their administration when they lied and said other countries pay the tariffs] — and that’s the average business employee in the US, since anyone with a level 2 on the OECD can likely fake it in a STEM career in the US.
As for THE PROPHET‘s reasons as to why Spend Analysis has consistently underperformed the hype:
- While 3/4 of solutions have always been reporting in drag, I’ve been highlighting at least a dozen Best of Breed solutions consistently for the past decade. They have existed for the past 20 years, you just had to look (and understand what to look for. But this site did a great job of helping you with that!)
- Yes, scale came at the cost of dumbing down the UX (for the US market in particular)!
- Unfortunately there is no faster way to die as a Spend Analysis vendor then to get scooped up by a (mega) suite or a Big X Comsultancy.
- Actually, the analytics and optimization is not powerful or complex enough in most solutions. Again, the problem is that the vendor didn’t add incremental levels of simplification (i.e. dumbing down) so each user could take advantage of it at their mathematical (in)competency level.
But the real reason, as hinted above, is that employees resisted these advanced spend analytics solutions because they knew they didn’t have the mathematical skills to use them. (Which the US Education System should be blamed for [and why it should be fixed, not dismantled], not the employees, unless those employees went to University and chose not to take math courses to try and make up for the failings of the public education system they were subjected to.)
As for THE PROPHET‘s signals that the times they are a changin’:
- Good + Cheap = Dangerous
Faster? Check! Cheaper? Check! Smarter? Well … Ask Woody! - Analytics is Merging with Execution
This is key for adoption of analytics — do it when you need it and apply the findings right away. - Intake, Orchestration and Agentic Tech
I guess I have to say it again!
𝐒𝐩𝐞𝐧𝐝 𝐎𝐫𝐜𝐡𝐞𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐢𝐬 𝐂𝐥𝐮𝐞𝐥𝐞𝐬𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐏𝐨𝐩𝐮𝐥𝐚𝐫 𝐊𝐢𝐝𝐬!
When what we really need is a Revenge of the Nerds! (If the USA even has any left!)
However, the real reason that we may finally be entering a new era in analytics is the following:
4. Most companies are trying to stave off bankruptcies as a result of US trade, market, etc. decisions that have already bankrupted many SMEs and they now realize that analytics is a key part of that solution. You can’t optimize spend you don’t understand, or understand the impact of a sudden 145% increase in tariffs if you don’t understand how much you are sourcing from the country in question.