Many companies evaluating spend analysis providers decide to undergo a proof of concept (POC).  POCs are limited scope exercises where the evaluating company provides a subset of spend to the potential providers in order to evaluate their enrichment capabilities.  While POCs can be valuable, there are some things to keep in mind when doing a POC:

 

1) Determine your evaluation criteria prior to the engagement.  You'll want to compare the individual provider's ability to classify your spend as this will undoubedly be a key driver.  However, avoid a bake-off scenario where a small sample size of transactions are compared.  The worse thing you can do is select the wrong supplier because of a couple of incorrect classifications found by chance.

 

2) Evaluate all aspects of the providers capabilities beyond only classifications during the POC delivery including user interface, supplier enrichment capabilities, market intelligence insights.  Also consider the provider's ability to provide complimentary services.  Spend analysis tends to be a complicated undertaking with an IT component, change management and training needs.  Be sure the provider can address ALL your needs.

 

3) Include the true measure of your data from a quality perspective.  If you have poor data quality, do not include only the good stuff in the POC else you won't get a good assessment of the provider capabilities to address your needs.

 

Feel free to chime in with your thoughts.

 

Regards,

 

Ken Miklos

Sr. Product Market Manager, Ariba