Walnut Creek, CA May 15, 2002 Content management specialist Softface this week stepped into a new arena, unveiling its Procurement Intelligence Suite, a new automatic spend analysis solution designed to collect unstructured product and services spending information to help purchasing executives make better procurement decisions.
The new suite addresses a critical problem facing many enterprises: A large amount of a company's spending history is unusable by analysis tools due to poor data quality. Currently, data frequently is structured differently throughout the enterprise, lacking in uniformity, clarity and detail. Producing a unified, global analysis of corporate spending requires making sense of both structured and free form text data from a myriad of transaction systems, a daunting and costly process.
Softface said its solution clarifies data, extracts meaningful details about the items purchased, adds parent/subsidiary information to suppliers and highlights where it has found useful data in multiple hierarchies. The solution structures, attributes and normalizes purchasing history so it can be used in various analysis environments, although the solution includes analysis and reporting tools, according to the software company.
The goal of the solution is to help companies identify sourcing opportunities, to provide leverage to sourcing teams and to monitor and report on purchasing compliance across the enterprise. In addition, Software said the solution allows a company to maintain the captured intelligence in-house for future reference, unlike some service-based solutions in which the gained knowledge leaves when the consulting contract expires.
The core technology in the new solution is based on the same natural language technology that Softface has used in its software for structured product content creation. "The [suite] is unique to the market because it leverages our deep experience in automated structured product content creation," said Olivier Sermet, CEO and president of Softface. "Spend analysis was a natural next step for the Softface technology because we have easily added supplier intelligence to our architecture."
With purchasing data locked in various systems throughout a company, Softface said its solution allows a company to analyze all purchasing records in an enterprise, including purchasing requisitions and orders, accounts payable and purchasing cards, among others.
Softface particularly emphasizes that the software provides a repeatable, automated infrastructure for spend analysis that can be used in ongoing strategic sourcing efforts. "Once you have achieved savings once, you need to be able to repeat the savings on an ongoing basis, not just every year but maybe every quarter, to have a good handle on your quarterly spend and continue to improve your savings," Sermet said.
Tim Minahan, vice president of supply chain research at technology consultancy Aberdeen Group, agrees that Softface provides information that could be useful for sourcing efforts. "Softface's new Procurement Intelligence Suite provides a foundation for effective strategic sourcing by automating and enhancing the spending analysis process from initial data capture, cleansing, and normalization through data enhancement, refreshment, and repeatable analysis," Minahan said.
Softface enters an increasingly crowed field occupied by providers ranging from Aentropy, Analytics (formerly ShareMax), D&B, eBreviate, Zyborg and Zycus, as well as e-procurement and enterprise resource planning providers. In fact, Aberdeen Group has reported that the market for automated sourcing solutions will nearly triple from its current level within two years, reaching $3.3 billion by 2004.
Sermet links the surge in interest in spend analysis tools to the increasing use of e-procurement and e-sourcing solutions to bolster companies' bottom lines, which in turn stems from the recent economic downturn. "The economic environment is forcing Global 2000 companies to pay attention to traditional criteria for business success ... and as a result, procurement is getting a lot of interest because an efficient procurement process helps impact your bottom line," Sermet said. "And the ability to track spending is key to supporting the entire [procurement and sourcing] process." Thus the rising interest in tools like the Softface solution.
In announcing the new solution, Softface also named two customers for the Procurement Intelligence Suite: Cadence Design Systems and Royal Caribbean Cruises
San Jose-based Cadence Design Systems, a supplier of electronic design products and services, implemented the suite to automate the spend analysis process of clarifying and enriching SAP and Ariba procurement history. Cadence, with revenues of $1.4 billion, spends hundreds of millions in indirect spend annually.
"Softface provides us access to the level of spend detail that we have never been able to achieve through our previously manual data enrichment processes," said Kendall Mills, group director for worldwide procurement at Cadence. "This is the kind of technology that can really help us speed and hone the analysis of our spending."
Royal Caribbean Cruises also is set to use the new suite, having already used Softface's Enterprise Content Suite to organize inventory information for its 21 ships, which included taking more than 800,000 items and consolidating to 30,000 unique commodities in a relatively short period of time. "We saw how Softface could help us in terms of purchasing ... and how to organize our information internally," said Mike Allsup, vice president of supply chain management at Royal Caribbean Cruises.
The Softface Procurement Intelligence Suite, available immediately, structures, attributes, and normalizes purchasing history so it can be used in any analysis environment. Pricing starts at $250,000.