A data-driven approach, based on proven methods to provide a forward-facing 12-month projection of IT spend
The HG Insights Spend Model is a forward-facing 12-month projection of IT spend across an organization, with spend related to internal operational IT.
HG Insights (HG) employs a data-driven approach to IT spend projections, overlaid with a consensus-based forecasting component, in order to generate reliable data at the individual account level and rolling up to the market level. HG’s approach is informed by myriad internal and external data sets and inputs, and triangulated against vendor data and the publicly-stated positions of credible data providers.
Some data providers include both enterprise and consumer spend in their models. HG provides Enterprise spend only. HG’s model is initially broken down into internal and external spend. Internal spend represents spend for a company’s own IT department, generally on staffing and maintenance. External spend represents spend through third-party vendors, on hardware, software, services and communications. Many providers focus exclusively on external spend projections.
Beyond the internal and external spend segmentation, HG reports through its top-level technology categories, and segments further into more than 130 spend categories. The Model distributes spend cleanly through these spend categories, meaning there is no duplication of spend across multiple spend classes.
HG provides a 12-month rolling IT spend projection, based on an underlying algorithm that is updated twice a year to reflect important market shifts, and applied each month to an updated set of company firmographics. In this way we aim to always provide the most up-to-date and relevant view of a company’s projected spending behavior for the upcoming 12 months.
Finally, some providers report at the market level only, or at a country level. HG provides such market-level roll-up data, but also provides the intelligence on the specific accounts that are contributing to any country or category roll-up.
Spend Model, includes:
- Robust, data-driven approach
- Leveraging gold standard D&B company and hierarchy information, enhanced by daily curating by a 40+ person research team
- Leverages consensus-based forecasting
- Granularity of cohort structure
- Unique output of reliable spend data at account and market level
- Dual-output of absolute and relative spend to address broader use case application
- HG Insights Spend Model is updated twice per year
Accurate, Reliable Spend Projections
There are a number of quality control processes in place to test the accuracy and reliability of HG spend projections. Among the most important of these are steps to triangulate spend data outputs with other important contextual data sources, to determine that spend data is in alignment with other supply and demand side data points.
There are three main points of triangulation:
- Vendor Revenues – identification of key vendors across any given spend category, and the in-depth review of their financial accounts and a consideration of how they map to the HG spend taxonomy. This combination of data-driven analysis with a contextual understanding of vendor penetration and market fragmentation provides a strong validation point that our market roll-up’s are in alignment with important supply-side metrics.
- Market Projections – Consensus-based forecasting is a crucial component of the HG Spend Model build. The review of such data available in the public domain is part of our efforts to ensure broad consistency with those providers, whose data may be already embedded in client processes. contribute to those market roll-ups.
- Account Level – The provision of company-level spend data is a core output and therefore that data is tested each time a client engages with it. HG’s client base includes many of the world’s largest B2B players and in many cases, our spend data is deeply ingrained in their wallet share analysis. The degree to which HG spend data is relied upon by these kind of companies over many years is a testament to the accuracy and reliability of spend projections at the account level.
Summary
The HG Spend Model is a forward-facing 12-month projection of IT spend across an organization. The model is based on proven methods, updated twice a year to ensure data accuracy to current market conditions that impact IT spending behavior.
