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Emptoris Extends Spend Analysis Software

by Alan Alper, MA Editorial Staff

Posted on Tuesday, November 14, 2006 6:31:00 PM       Sign Up to receive Daily News Alerts in your E-mail Inbox                               

Emptoris, a provider of supply and contract management software, tomorrow will unveil upgrades to its spend analysis offering that for the first time provide self-service capabilities for analyzing procurement data residing across the enterprise as well as functionality for making on-the-fly business rule changes to correct misclassified transaction types.

In conjunction with the release of version 6.1 of its Spend Analysis software, Emptoris also unveiled new data extraction services to help customers expedite access to critical purchasing data locked inside various enterprise applications. Together, the software and service offerings extend the company's profile in the nascent spend analysis market, which, according to Forrester Research, is growing at about 11% compounded annually and will reach $100 million this year.

Spend analysis is considered critical for larger, decentralized companies that have either grown through acquisition or diversified into various and sundry businesses, and whose operations run on a panoply of ERP systems -- be they different instances of the same vendor's applications or multiple vendors' products. Software from companies in the space -- such as Emptoris, Ariba, and Zycus -- essentially extracts, cleanses (adds consistency and eliminates duplication), and classifies data residing in accounts payable and procurement applications, as well as other enterprise systems.

The enriched data is stored in a data cube that layers on top of existing enterprise applications. Users then deploy knowledge bases of business rules that can be applied and updated to more effectively track spending patterns and help modify behaviors. Rationalizing this data enables purchasing managers to more intelligently analyze their expenditures, identify cost-saving opportunities, comply with corporate policies, and/or eliminate maverick spending, analysts said.

ERP vendors offer basic spend-tracking modules or more generic business intelligence applications that usually require data warehouses to be built using vendor-specific or third-party data extraction and analysis tools. While these approaches may enable the depiction of spending trends in graphical form, they lack one critical ingredient: the cleansing and enrichment tools needed to really understand the data, noted Debbie Wilson, an analyst with Gartner Inc.

"The idea [of spend analysis software] is to deliver enhanced data in a more manageable form," she said in an interview with Managing Automation. "Put it in a data cube and let users play with it."

Emptoris's updated Spend Analysis software includes a number of new modules that are said to improve data extraction and transformation from all types of transaction systems. A new Spend Data Manager, for instance, leverages vendor and MRO Item Knowledge Bases to consolidate and classify spend by vendor and commodity. Feedback approval allows the system to re-classify spend automatically based on feedback from end users.

Importantly, the new Spend Data Manager allows customers to manage the spend data consolidation, classification, and enrichment process in house, the company said. This saves time in extracting and making sense of spend data stored in applications across the enterprise, and removes a business process obstacle: IT departments that are leery about allowing sensitive business data to be moved beyond their firewalls, Gartner's Wilson said. Emptoris or third parties, she said, handle this activity for customers.

Emptoris recommends a 64-bit, Intel Xeon-based server architecture with 16 gigabytes of RAM to run its software in large-scale deployments. Having enough horsepower is critical to spend analysis success, Wilson said. "There's been some talk of performance issues," she noted. "You need to be sure to have adequate host power underneath, whether [Emptoris] hosts or you do."

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