Spend analysis is the process of identifying, gathering, cleansing, grouping, categorizing and analyzing your organizations spend data with a goal of decreasing procurement costs and improving efficiencies. Definition spend analysis is the process of collecting, cleansing, classifying and. Spend analysis technology or spend analysis software is a business software developed to automate the entire spend analysis process. Browse our selection of spend analytics resources and thought leadership pieces from the spend analytics experts at spendhq. We present flowchart of spend analysis process in form of a dataflow diagram. The analysis is conducted by coupling spend data with analytical methods and tools. Use of procurement software or excel based spend cube allows for easy spend data analytics. Monthly update our programs are fixed and inclusive. Spend analytics resources spend analysis software spendhq. But if youre not leveraging procurement spend analysis as part of your procurement process, you could. According to the same deloitte report, spend analysis and reporting, will be the area of procurement most impacted by technology over the next five years.
Spend analysis 101 comprehensive guide for beginners sievo. Spend analysis is the process of analyzing historical sp end by collecting, categorizing, cleansing, and evaluating data on spend from all business unitsdepartments across the organization. Procurement spend analytics is the process to collect, cleanse, classify and analyze spend data through either dedicated software or oneoff spend cubes. Ai and the future of spend analysis, procurement analytics. Recognizing the potential in government purchasing, gao. Reduce enterprise spend through procurement visibility by providing greater visibility, sas. If spend analysis does generate significant cost savings and provide procurement efficiencies, then why did a recent aberdeen report on spend analysis say that onethird of enterprises do not have a formal program in place to manage spend analysis for the enterprise. Maverick spending is also eliminated through the implementation of a more controlled, centralized procurement process, that often comes out of a detailed spend analysis report. Jul 21, 2017 spendhqs chief revenue officer, david bush, joins the art of procurement podcast for a two part series on spend analysis. The importance of spend analysis in your procurement.
Key elements of spend analysis spend analysis should be the foundation on which sourcing initiatives are based on. Sas spend analysis helps you reduce enterprise spend through increased visibility into procurement information. Abstract this paper introduces spend analysis, spend management and supplier management field. Niche procurement intelligence companies can offer functional expertise to make more sense of an organizations spendrelated insights by contextualizing these findings with events and trends currently dominating the industry. Spend analysis should include the identification, automated collection, cleansing, grouping, categorization, and analysis of.
It is essential to link spend analysis with external market intelligence. It describes the need for a spend analysis system, its benefits and savings which such system can help to achieve. Details of the spend analysis and opportunity assessments are provided in this presentation. Direct savings as mentioned, organizations are under pressure to both maximize profits and reduce costs. Spend analysis is performed by companies to increase profitability through identifying wasteful spending and flagging contracts that can be renegotiated. Payment analysis enables us to analyse payment practises and terms within your p2p process to identify issues such as unrealise d discounts through late payments of invoices or unrealised interest from early payments of invoices. Spend analysis should include the identification, automated collection, cleansing, grouping, categorization, and analysis of all spend data for the goods and services purchased for the organization. Risk metrics and market data related to the supplier bases can be incorporated to provide additional levels of insight.
Spend analysis is the process of cataloging your aggregate business spend throughout your organization, with the end goal of reducing expenses over the long term. This paper highlights the fundamentals of data management and the. Advanced analytics provides datadriven insight and power that procurement can leverage to make impactful business decisions. Reap the benefits of spend analysis with the right tools and.
Our intuitive platform makes any complex procurement process feel like a breeze. The sheer volume of ordered line items and a long list of suppliers can complicate spend analysis in spite of the low value of spend there are possibilities that business groups of the same firm are working in silos with. It increases efficiency and accuracy while aggregating, cleansing, classifying and analyzing enterprisewide purchasing data. Aug 15, 2019 procurement teams perform spend analysis by identifying, collecting, cleansing, enriching, classifying, and analyzing spend data sets. Supplier classification and categorization is key to understanding company spend data. An introduction to spend analysis and spend management. During a spend analysis, you identify, gather, categorize, and analyze everything your organization. Miles who, in his book techniques of value analysis and engineering, described value analysis as a philosophy implemented by the use of a specific set of techniques, a body of knowledge, and a group of learned skills and as a creative approach which has for its purpose the efficient identification of unnecessary. In 2014, unfpas medical device procurement spent composed of 366 unique item lines, grouped in subcategories. Read more spend analysis mistakes that can mar your sourcing strategy. Have a detailed spend map across your entire organisation, updated quarterly. Spend analysis is the process of collecting, categorizing and evaluating expenditure data, either by human hand or through software.
Spend analytics provides a single view into all supplier spending historical and plannedpredicted in order to improve that spending through better sourcing, compliance, and demand management. The goal of spend analysis is to increase profitability within an organization by identifying wasteful spending and reducing procurement cost. The future of spend analysis, and how ai can transform the field of procurement analytics and improve spend visibility, facilitate strategic sourcing, help in supplier selection and identify risks. The importance of spend analysis in your procurement process. Podcast a procurement leaders guide to spend analysis. Spend analysis as part of category management will facilitate the identification of purchasing trends, buying patterns as well as monitor utilization and spend consolidation of key strategic suppliers to support your category. Who trusts the data in their finance system to provide them with the answers to procurement questions. Use of procurement software or excel based spendcube allows for easy spend data analytics. By using our site, you consent to our privacy policy. Spend analysis strategies spend analysis overvie w. By choosing a procurement solution that includes spend analysis as well as the likes of eprocurement, esourcing and supplier contract management, your organization will have all relevant. Identification is the measurement of total spend and the selection of target groups within it to narrow the scope of the analysis to specific product categories and subcategories, suppliers, departments.
Tail spend is known for its high number of subcategories, huge item counts, and a substantially high number of suppliers. It creates an understanding of the organisations spend structure and enables actions to be. By choosing a procurement solution that includes spend analysis as well as the likes of e procurement, esourcing and supplier contract management, your organization will have all relevant. Posted by jaggaer staff in spend analysis on may 31, 2016 spend analysis is the process of identifying, gathering, cleansing, grouping, categorizing and analyzing your organizations spend data with a goal of decreasing procurement costs and improving efficiencies.
How to conduct a spend analysis in seven steps jaggaer. Over 4 million companies drive more business value by using ariba network and sap ariba procurement software to collaborate more effectively on spend management, contract management, supplier management, and financial supply chain management. Procurement spend by item excluding fistula and erh kits 22. The objective is to present practical information for procurement professionals on why spend analysis and enterprisewide spend visibility is a critical enabler to strategic sourcing. Art of procurement, the leading podcast for procurement professionals, invited david bush, chief revenue officer of spendhq, to discuss the steps that procurement leaders can take to gain greater visibility into supplier spend, which is the foundation of robust.
Simplify your purchasing, analyze your spending, and get back to what you do best. Whos undertaken a spend analysis exercise in the past 12 months. Coupa analytics spend analysis solution comes with predefined dashboards that are specific to finance, procurement, and operations professionals. Procurement organizations should use spend analysis to leverage buying power, reduce. Pdf managing procurement spend using advanced compliance. It creates an understanding of the spend structure. Spend analysis is the process of collecting spend data from all purchasing sources and systems, cleansing the data, categorizing the data and analyzing it for the purpose of understanding spending trends and identifying saving opportunities. Documenting purchasing has a lways been a best practice for financial and acquisition management.
One of the earliest writers on the subject of value analysis was lawrence d. Spendhqs chief revenue officer, david bush, joins the art of procurement podcast for a two part series on spend analysis. The spend analysis aims to inform strategies that realise savings on total spend and. Drill down to transactional details closely tied to the transactional bsm processes, coupa lets users drill from high level kpis to detailed reports and to individual transactions spanning purchase.
You can also perform weighted supplier ranking to identify your best suppliers. Learn about the strategic importance of spend analytics as a precursor to procurement and supply chain transformation be presented with a framework of where spend analytics fits in the value creation continuum. With eight unique modules at your disposal and industryleading service and support, procureport transforms into the exact procurement solution your workflow. If your company has different projects or divisions and recording is decentralized, conducting a spend analysis may be a challenge.
Few companies have employed standard procedures or systems to control spending from. Procurement teams perform spend analysis by identifying, collecting, cleansing, enriching, classifying, and analyzing spend data sets. Art of procurement, the leading podcast for procurement professionals, invited david bush, chief revenue officer of spendhq, to discuss the steps that procurement leaders can take to gain greater visibility into supplier spend, which is the foundation of. May 28, 2018 spend analysis is the process of cataloging your aggregate business spend throughout your organization, with the end goal of reducing expenses over the long term. Sample spend analysis procurement services provider. During a spend analysis, you identify, gather, categorize, and analyze. Value analysis va chartered institute of procurement. Perhaps more than any other area, the goal of spend analysis is the increased. Spend analysis as part of category management will facilitate the identification of purchasing trends, buying patterns as well as monitor utilization and spend consolidation of key strategic suppliers to support your category strategy. Reduce enterprise spend through procurement visibility by providing greater visibility, sas spend analysis lets you leverage. Perhaps more than any other area, the goal of spend analysis is the increased visibility that provides the means for improving spend and supplier performance within a procurement organization.
Visibility into spend data allows pt berau coal to. Direct spend in procurement refers to goods and services that. Spend analysis is a tool that provides knowledge about who are the buyers, who are the suppliers, how much is being spent for what goods and services, and where are the opportunities to leverage buying power. The first step is to analyse past and projected procurement expenditure or spend for goods, services and works spend analysis.
Spend analysis, powered by the sap hana platform, brings visibility into your spend and supply base, so you can find the best opportunities to balance cost, revenue, and demand expectations. It is currently the only reference that provides indepth guidance on what spend analysis really is, what it involves specifically and how to use it in your journey to worldclass performance. Compliance analytics, procurement, spend analysis, data. It is currently the only reference that provides indepth guidance on what spend analysis really is, what it involves specifically and how to use it. This is a subset of broader procurement and supply chain analytics, but is a critical component of a complete procurement solution suite. Procurement solutions procurement strategy procurement talent management procurement technology sourcing sourcing solutions spend analysis spend management strategic sourcing strategic sourcing software strategic. Spend analysis forms a solid foundation for sourcing initiatives. Portfolio analysis is now widely used in identifying optimal strategies for category sourcing at global, regional or local levels, based on an assessment of two of the most critical factors affecting a supply market.
Spend visibility and analytics provide another opportunity for procurement to contribute to wider business objectives. The data included in the spend analysis might include purchasing data, payment data, credit card data. Spend analysis standard procurement organizations should use spend analysis to leverage buying power, reduce costs, provide better management and oversight of suppliers, and to develop an informed procurement strategy. How procurement spend analysis can cut costs purchasecontrol. Analysing the procurement portfolio and developing a. Spend analysis and the supply chain in this course, participants will. Spend analysis the complete guide to savings opportunities. The benefits obtained by organizations with spend analysis can be seen in the areas of cost effectiveness, cycle time, process efficiency, and staff productivity.
238 833 527 785 1475 173 1102 484 261 13 1510 601 1116 1461 470 726 472 1154 899 1128 656 616 1418 125 167 375 700 41 737 850 45 1096 495 913 882 316 1160