What is Spend Analytics?

What is Spend Analytics?

Spend Analytics, is process of using statistical and mathematical analysis of procurement spend data, that discovers, interprets and predicts meaningful patterns in supplier spend data. Analysis that gives procurement the foundation to make informed data-driven decisions, that are aligned with the company goals & objectives for direct spend analysis and indirect spend analysis. To achieve this bespoke Spend Analytics Software is used.

What is Spend Analysis In Sourcing?

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Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

What is Business Analytics?

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Business Analytics Technology provides, Business Analytics, involves extracting, transforming, organizing, verifying, essential data required to build analytics dashboard Power BI.

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Spend Analytics Technology

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Spend Analytics Technology provides, Spend Analytics, involves extracting, transforming, organizing, verifying, essential data required to build procurement spend analytics dashboard Power BI.

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Procurement, Direct Procurement, Supply Chain

What is a Category Management Dashboard

Procurement, Direct Procurement, Supply Chain

A Category Management Dashboard, is a data-driven management information process, that supports Category Management and provides real time sourcing information on the number suppliers, spend in period, type of spend and spend purchasing patterns. Dashboards that inform the category manager by monitoring spend, assessing performance and taking corrective sourcing actions to deliver business commitments.

Category Management Dashboards, provide real time information, help shape policy and strategy, provide progress on strategic and tactical sourcing decisions. At its core category management is the management of spend groups aligned by supplier, types of goods and services, the aim of the category manager is to put in place sourcing contracts and policies that provide the company with vetted, approved or preferred supplier lists.

Category Management Dashboards, provide a 360 view for that category, normally focused in two areas, preferred suppliers with agreed contracts in place and the review of maverick or long tail supplier information. To create a functional Category Dashboard for procurement, the following spend analysis process is used.

Procurement, Direct Procurement, Supply Chain

Purchasing, Procurement, Indirect Procurement

What Do Spend Analytics Consultants Do?

Purchasing, Procurement, Indirect Procurement

Spend Analytics Consultants, provide a mix of analytical and management consulting skills, that provide spend visibility, advisory, strategic sourcing with Opportunity Analysis, Cost Saving identification, and Delivery.

Consultants provide management with independent advice relating to strategy, structure, management, or operations.

It may include the identification of options with recommendations, assistance with the implementation. Consultants are split into many multiple levels of subcategories and may be used to fill gaps in capacity, knowledge, and experience.

Purchasing, Procurement, Indirect Procurement

Procurement, Supply Chain, Indirect Procurement, Direct Procurement

What is Automated Spend Analysis?

Procurement, Supply Chain, Indirect Procurement, Direct Procurement

Automated Spend Analysis, is the process of systematically, extracting, consolidating, aggregating, transforming, and sharing company spend data, that provides regular updates and insights, that inform the appropriate sourcing decisions. Automatic Spend analysis software is a collection of tasks or sub-processes that have been automated to provide spend visibility, automatically organized in a specific workflow that captures spend data, that is analysed, classified and shared it with business stakeholders.

Procurement, Supply Chain, Indirect Procurement, Direct Procurement

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

What is Spend Analytics Software?

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Spend Analytics Software provides, Spend Analytics, involves extracting, transforming, organizing, verifying, essential data required to build procurement spend analytics dashboard Power BI.

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

What is Procurement Spend Analysis?

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Spend analysis is the process of gathering, cleansing, aggregating, categorising, and transforming company spend data, that provide procurement, with the insights that drive value, innovation, efficiency, effective sourcing with risk mitigation. Analysis that gives procurement the foundation and data support, to make faster, better, informed decisions, that are aligned with the company & procurement objectives.

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Procurement, Supply Chain, Indirect Procurement, Direct Procurement, Purchasing

What is Spend Data Classification?

Procurement, Supply Chain, Indirect Procurement, Direct Procurement, Purchasing

Spend Classification is the process of grouping spend data for similar goods or services, assigning them to predefined categories using a Taxonomy document. A hierarchal taxonomy or framework, that spans many major purchasing sectors with multiple sub-categories, that provide procurement managers with clarity, spend visibility, and purpose.

Procurement, Supply Chain, Indirect Procurement, Direct Procurement, Purchasing

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Chart of Accounts : Spend Analysis

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

Chart of Accounts is normally held by the finance team, in the form of an indexed document or guide. Chart of accounts provide a list of General Ledger codes that form the basis of all the transactions taken within the company, for spend analysis, accounts payable information is used.

Procurement, Supply Chain, Purchasing, Finance, Direct Procurement

What is Spend Analytics?

Spend Analysis provides sourcing teams with insights using historical spend data, supporting strategic and tactical sourcing decisions, aligned with Procurement (KPI’s). Spend analysis is an example of how sourcing metrics and analytics are used to improve sourcing, requisitions, purchase orders of goods and services vital to the organisation. Sourcing Managers rely upon spend analysis reports and sourcing dashboards, to analyse data, market trends, supplier performance, analysis that provides the following Sourcing benefits:

Cost Leadership
Cost Management
Value Delivery
Governance & Compliance
Operational Efficiency
Supply Chain Innovation
Responsible Sourcing

Procurement executives and sourcing teams rely upon spend analysis, to provide a solid data foundation, that is trusted, accurate, and aligned to company objectives. Spend Analysis, is an important and vital process, the following section will explain in more detail

Why Spend Analysis is Important?

The aim of Spend Analysis is to focus on value-add areas that will optimize the supply chain, making it more efficient, and importantly increase procurement value. Well-established procurement teams have leveraged Spend Analysis for many years to scale output, drive down costs and thereby providing increased Value. Spend Analysis needs to be easy to understand and share with Executives, Management and Suppliers.

Edward McGeachie24 August 2020