Monday 20 April 2015

Importance of Spend Analysis

Authored by  Junaid Khan 

Spend Analysis is process which includes information gathering categorizing, evaluating historical data with the help of different reports. This process ultimately increase cost saving of any organization through renegotiation events for different existing contacts. 

Spend analysis is very difficult without any specialized ERP because it involve lot of steps of getting data that may come from multiple sources and the type of data always include supplier, commodity and spend information. Therefore it is essential requirement of any organization to develop a software through which data can be compiled in meaningful ways so that organization can see spending patterns and identify opportunities for savings.  

Spend Analysis data will allow you to make an informed decision on how processes within your organization could be improved. It also helps to manage maverick spend, supplier relationship, over payments and quantify organization savings. In current business era many organizations are running their business with collaboration of local SMEs and If you have all your spend data in one place, and in a format common to other organizations, it becomes much easier to consolidate your data together. The spend cube is the final output of a spend analysis process. The spend cube allows stakeholders to look at all the analyzed data from various angles. Supplier density in specific categories, Spend volumes across categories, addressable vs non-addressable spend, etc. are some of the key value outputs derived from the spend cube.