Emptoris releases updated spend analysis tool

By Susan Avery -- Purchasing, 11/15/2006 12:59:00 PM

Emptoris has released the latest version of its spend analysis tool. It consists of a spend data manager and a realtime spend classifier, as well as enhancements to its spend analyzer and new spend and contract visibility tools:

• The spend data manager allows users to take aggregated financial and purchasing transaction data from multiple systems, run it through auto-classification engines that leverage supplier and item knowledge bases, and transform it into procurement intelligence. The spend data manager uses automated classification techniques, including Bayesian, Natural Language Processing and Nearest Neighbor algorithms, for classification based on purchase order (PO) text descriptions. It also uses advanced rules-based classification for indirect spend transactions where limited information is available in item text descriptions.

• The real time spend classifier “closes the loop” for spend data classification, providing accurate and granular classification of spend data. The real time spend classifier performs realtime contract analysis to provide information on available contracts, helping to reduce off contract spending. The real time spend classifier integrates with requisition and PO systems and leverages Emptoris supplier and item knowledge base, as well as contracts information.

• The spend analyzer provides users with fast, on-the-fly multi-dimensional analytics, and drill-down capabilities to individual transactions. The analytics provide access to spend transaction data across dimensions (ways users classify data) and ability to drill into and refine spend data views.

• Enhanced spend and contract visibility allows users to analyze spend against contracts to reduce maverick spending, realize supplier rebates and enforce contract compliance. Users can see in one analytical view which suppliers have contracts, how spending aligns against contracts, which organizations are buying from contracts and how much they are spending.

All the tools in the Emptoris suite are available either on demand or as behind- the-firewall software. The company also now provides data extraction consulting services. 

In the same announcement, Emptoris reported year-over-year revenue growth of 86% for the third quarter of 2006.

Emptoris regularly conducts benchmarking studies of its customers. Recently, it finds:

• Customers see increasing value by analyzing spend data several ways or dimensions: More than 60% look at spend data across 12 dimensions, and more than 30% use 15 or more dimensions. In addition to basic supplier, category, and time dimensions, additional dimensions include: supplier diversity status, preferred supplier status, supplier performance and scorecard information, budgetary information, on/off contract, contract performance and ISO certification.

• Customers are classifying spend at even deeper levels of granularity: More than 70% classify spend 3-6 levels deep in the commodity taxonomy. Several companies use UNSPSC codes, although more than 60% use their own custom taxonomies for additional value.

• More than 58% of companies update spend data on monthly basis.  Twenty-six percent use quarterly refreshes and the rest use six-month or annual refreshes.

The company also recently conducted a survey of purchasing professionals with the Institute for Supply Management. The findings show purchasers face significant obstacles to gaining spend visibility, including: poor data quality, aggregating data from multiple systems, spending not linked to contract obligations and transaction data not mapped to commodities. In fact, more than 56% of respondents to the survey complain of substandard spend data quality at their companies.

For more information on achieving spend visibility, register for the webcast called: Overcoming the challenges to achieving greater spend visibility.