Sunday, August 24, 2008

Search Vendors adding Spend Analysis capabilities

Jason Busch in his Spend Matters blog recently wrote about enterprise search vendor Endeca possibly entering Spend Analysis market ( In my opinion this is just another example of collision of Search and Business Intelligence markets. BI vendors were already applying BI toolkits to Spend Analysis and now Search vendors are also following them into Spend Analysis.
The worlds of Search and traditional Business Intelligence are merging. BI vendors are adding search features and search vendors are pushing the envelope for reporting & analytics. For example, ad hoc reporting can be better implemented by apply parametric search coupled with charting & graphing.

It will be interesting. Historically, Spend Analysis always included reporting & analytics components but advanced search and data mining capabilities can make spend analysis much more powerful and actionable. It will be worth watching not only Endeca but also other search vendors like Autonomy, Fast Search & Transfer (now owned by Microsoft), and even Google.

Search vendors can also leverage their technologies into Spend Processing which is essentially a prerequisite to Spend Analysis. In fact, quite often Spend Analysis vendors will bundle Spend Processing with Spend Analysis. To perform a meaningful ranking of search results, Search vendors have developed various algorithmic approaches such as K nearest neighbor for pattern recognition classifier, Bayesian for probabilistic learning classifier, different weights for different words for Vector Space classifier. Those intellectual properties and techniques can be effectively applied towards elements of Spend Processing such as spend classification, supplier de-duplication, spend clustering, etc. Thus, I would expect that search vendors will play an increasingly important role in Spend Analysis.