Tom Beaty, CEO of SpendHQ
Tom is the CEO and founder of SpendHQ, Insight Sourcing Group and the Witness to War Foundation. Tom has over 20 years of strategic sourcing and management experience and has been recognized nationally for both his success as an entrepreneur and as an advocate for our war veterans. He received his BA in History from the University of North Carolina at Chapel Hill and his MBA from the Goizueta Business School at Emory University (Woodruff Scholar). Tom lives in Atlanta with his wife and three children.
SpendHQ is a spend analysis solution that provides rapid, accurate and detailed visibility into enterprise spend data. This full-service SaaS (Software-as-a-Service) spend analytics solution delivers actionable insight for sourcing and procurement professionals.
As a subsidiary of Insight Sourcing Group, SpendHQ is built by industry leaders with unmatched sourcing knowledge. Inc. Magazine has ranked Insight Sourcing Group among the fastest-growing private companies in America every year since 2008. In 2017, Insight Sourcing Group was also named the #1 Boutique Consulting Firm in the U.S. by Vault.com.
Jennifer Carl: Tell me about SpendHQ’s mission.
Tom Beaty: Despite spending tremendous amounts of money on ERP systems and other technology, a stunning number of companies do not have clear visibility into the money they spend with vendors and third parties. The data is often scattered across multiple ERP instances and expense systems, all with totally different expense coding. For example, one of our clients had 19 spelling variants of FedEx in their vendor master charged out to 26 different General Ledger codes ranging from two different ‘Small Parcel Shipping’ categories due to a past merger, to charges to ‘Marketing’ as that department used FedEx for a campaign. There was no way for the company to know what they spent with FedEx and in this expenditure category in general and therefore, they were unable to negotiate effectively with the vendors.
SpendHQ’s mission is to solve this challenge by consolidating spend data wherever it resides and then categorizing it in a way that aligns with the supply market. This allows companies to identify cost reduction opportunities and to capture savings from their spend with third parties leading to improved profitability and improved cash flow, enabling investments in growth and other strategic areas.
SpendHQ is a faster, simpler way to achieve true spend visibility for procurement and sourcing leaders who know they aren’t seeing the whole picture. At SpendHQ, we remain committed to providing procurement leaders with access to sourcing-caliber data with the industry’s most intuitive user interface, enabling our clients to do their job more effectively and with greater strategic focus.
Jennifer Carl: What were you doing before you joined SpendHQ as CEO?
Tom Beaty: Before I founded SpendHQ, I started the strategic sourcing and procurement consulting firm, Insight Sourcing Group in 2002 out of my basement, and previously worked in the procurement and strategic sourcing space with firms like Deloitte Consulting, Procurian (now owned by Accenture). Insight Sourcing Group is a sister company to SpendHQ and its one of the things that gives us our competitive advantage. ISG is the largest pure play sourcing firm in the United States. As I built that company I kept running into clients with very poor spend visibility. SpendHQ was originally developed as an internal tool designed to help us rapidly identify opportunities for cost savings for our clients so that we could then perform our consulting work.
Today, we provide SpendHQ to many clients who are not consulting clients. However, our consulting team still uses SpendHQ every day for the same purpose as our clients. As a result, the product has our expertise deeply embedded in it and we have a large 100-person expert user group one floor away from our development team for SpendHQ. We are the only substantial spend visibility firm that is associated with a consulting group, giving us a unique market position.
This has been an incredible year for SpendHQ and we’re truly honored to have received recognition from some of the leading institutions in both the technology and procurement space. SpendHQ ranked as both a value and customer leader by the procurement research and advisory firm, Spend Matters, in their quarterly report on spend analytics solutions. Furthermore, we’re thrilled to have been recognized alongside some of the biggest innovators in the technology space in SIIA’s very own annual CODiE Awards, where SpendHQ was named the best Data Visualization Technology and also the best Big Data Reporting and Analytics Solution of 2018.
Jennifer Carl: How did you get your start in the technology industry?
Tom Beaty: My first job after college at UNC-Chapel Hill was with a technology firm in the Research Triangle Park in North Carolina. I sold accounting and management systems to the construction industry and then project managed implementations. In the mid-90s, I started a sales consulting firm focused on sales force automation. As part of that, I created one of the early Internet portals focused on the commercial insurance industry. I sold it and today, it is a multi-billion insurance industry association. At Deloitte Consulting I was heavily involved in software selection and optimization.
I have always had a tech bent and really enjoy being back in the space.
Jennifer Carl: What are your goals for the next 5 years? Where do you see yourself and SpendHQ?
Tom Beaty: We have ambitious plans for SpendHQ and plan to be the dominant player in North America. We are already the largest best-of-breed player in our space but compete with large suite solutions also. Our strategy is to aggressively expand our development capability and to double down on our embedded expertise within the product. We believe we have a vision for the product which is not only unique, it will redefine the category and we are confident we are the only player in the space with the expertise to pull it off.
We also plan to ‘wrap’ our tech solution in expert services that will create an ability to drive a measurable ROI on the tech investment which is hard to achieve with a technology-only solution. We are privately held and have no outside investment, giving us the ability to layer in services without fear of valuation impact.
Given our consulting work, we see a lot of underutilized technology in our space. We believe that by offering tech-only solutions plus tech enabled services, we can serve the full spectrum of clients across the procurement maturity curve.
Jennifer Carl: Give us your TechTip of the month.
Tom Beaty: Ultimately, the most important thing for an entrepreneur to figure out is the value proposition of their product and its defensibility. Too many companies launch products that address a problem but don’t offer a unique value proposition with measurable benefits. Or they come out of the gate strong but stagnate as competitors replicate their capability. If you can measure an ROI on the solution that is real, robust, and provable (and does not depend on overly optimistic mathematics), it is a lot easier to achieve escape velocity and scale.
The other lesson I have learned is to invest more in product design. The recent trend of ‘minimum viable product’ design may be more effective in B2C environments but my experience has been that a deeper product vision with a minimum level of design is important for developing foundational elements into the product to avoid future rework or worse, getting boxed into an inadequate tech platform.