BLOG

4 Spend Analysis Challenges Procurement Teams Should Know About

Apr 13, 2018

Spend analysis is undoubtedly an essential function of procurement in a business. Spend analysis, when correctly performed, can lead to insightful findings and better savings, and often act as a catalyst to drive business decisions for a company. Using a spend analysis solution allows companies to uncover the hidden potential lying within their data. Businesses can empower their team with business intelligence to make discoveries that can quickly grow the sourcing pipeline. However, procurement teams implementing a spend analysis solution can often face several challenges and roadblocks. Here are four of the critical challenges that wSE_Demo2e think procurement teams must overcome for undertaking spend analysis successfully:

Cleansing the data

The tasks to extract, cleanse, classify and normalize spend data should not be underestimated. Traditional, rules-based approaches to cleansing and organizing spend data can be time-consuming and may introduce inconsistencies if carried out manually. Automated methods may be quicker, but exceptions will undermine completeness, and therefore accuracy.

Insufficient resources

The purchasing team is of a company is often consumed with daily tasks such as buying basic materials for the organization. Spend analysis usually starts with purchasing and strategic sourcing. For this, procurement teams require IT support. Although the need for IT support has lessened significantly over the years, procurement teams still need to allocate resources to spend analysis and strategic sourcing to drive leverage across the organization.

Data silos

Each group managing spend has their own systems and their own data. In most companies, for security reasons, no one person has access to all the different systems. So, if procurement teams want to pull together all the data, different people have to be approached for various data.In this case, there are chances of encountering varying attitudes and degrees of cooperation from people having access to the data. Also, in many cases, data may be incomplete, inaccurate, or even inconsistent. In a rush to satisfy a requirement, some descriptions are too brief to understand the nature of the spend; sometimes errors in coding occur; and many times the same company may be referred to in different ways. These might cause confusion and miscommunication during procurement.

Resistance to change

Spend analysis can often be misunderstood. It can represent a threat to some stakeholders including customers, contracting officers, financial managers, etc. The best way to address resistance is with education. Develop briefings to educate anyone with an interest, informing them about what speed analysis is, how it can benefit them, and how can it contribute to success.


To know more about the spend analysis challenges that procurement teams encounter

Get More Info


Related Posts

[ess_grid alias=”Blog-studio” settings='{“max-entries”:”8″}’ special=’related’][/ess_grid]

Recent Blogs

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars