This week we're diving back into the topic of spend analytics and spend analysis, with a focus on smaller and medium sized businesses. We'll look at the challenges they face, and how smaller businesses can afford a spend analytics solution that works for their unique needs.

We're joined this week by Thomas Siersbæk Heller-Njor, from CostBits – a procurement professional who's entered the procurement tech space, with a unique spend analysis solution for the mid market.
Tailoring Spend Analytics to the Mid Market 
First up, I ask Thomas to introduce himself and his background.

Thomas started working in IT, then moved to working in procurement for the shipping line Maersk, where one of his projects was in spend management.

He found himself living in Cape Town, doing an assessment for the 42 sub-Saharan countries, and realised he had no tool for the job at hand: Gathering PO data, contract data, spend data, etc. So he built a very crude version of his software then, and realised it was a tool that others could benefit from.

He's excited to get to work in this space, and passionate about wanting to make data more accessible, available, and actionable.

I pick up on the word 'actionable' as a key differentiator between CostBits and its competition. What does this mean, and  makes CostBits stand out?

There's a range of different factors here. From a user perspective, the main benefit of CostBits (as well as a simple UI), is that most people stop with analytics. Maybe people working in strategy look into analytics once in a while, but his experience is that a good contract doesn't always equal real savings.

So how can he create a spend management platform that gives more? Data. All the data that CostBits get every minute, or even every second, can be mined.

Let's say you agree on a price of a hundred, then you get billed for a hundred and twenty, CostBits can use data to see that and ask “is this a good idea?”. It generates actions and guidance for normal people who can't see through millions of lines of complex data. It notices things: “There's a contract for this category and you're not using it – is that okay?”.

CostBits aims to bridge strategy and day-to-day operations with understandable suggested actions.
Building on invoices, not orders
This kind of contract / price discrepancy happens more often than we'd like to admit. One of my frustrations with pulling spend analytics from ERP is that procurement gets access to all the different reports around orders placed, but that's not spend – spend is what you actually pay on invoices.

That's why CostBits is built entirely on invoices, and if they can get purchase orders, contracts, and catalogue information, that gets added on top. When working with smaller mid-market customers, invoices are where the real useful information lies.

Smaller companies don't have a wealth of resources for data management. They may have maybe one person who does business intelligence, and they don't necessarily know the data. So CostBits simplifies this, by focusing on actions to create real impact.

Data and resourcing are critical here, and that I'd like to come back to that point. But before that, let's get back to basics. How much revenue or spend would a company need to have before they'd see the benefits of what CostBits?