Spend analysis is a term used to describe the process of accessing, organizing, and analyzing historical spend data of a business to address concerns regarding spend visibility, compliance and budget control. This process helps the organization to devise strategies that help them save costs and improve their procurement practices, thereby aligning their sourcing strategies to create a competitive advantage. Sourcing and procurement strategy, category management expertise and execution are vital elements of an effective and efficient supply management plan. However, just handful of organizations are aware of where exactly they are investing their money and effort. The procurement managers are devising spend management strategies based on instincts rather than facts and market insights.
Spend Management – How it’s done?
Spend management, in simple terms, is all about managing money and how to spend it to reap the best possible benefits to build products and services. It encompasses processes like outsourcing, procurement and supply chain management, and therefore, a spend manager has a pivotal role in this process. It ensures reduction in costs, operational efficiency and greater compliance in an organization. For an effective spending analysis and data management, these attributes are absolute essentials:
- The spend data of both – internal and external business systems – are to be extracted.
- This extracted data must be further validated by spend managers as accurate and complete.
- In order to eliminate discrepancies, cleansing and classifying the available data is crucial.
- This cleansed and classified data must be further enhanced with corresponding business information such as terms of contract, financial status and performance of suppliers, etc.
- Finally, this actionable spending data should be analyzed using third party analytical tools
Give Your Spend the benefit of ‘SpendEdge’
Wondering about how to go about managing spends? This is exactly where our spend analysis services comes to your rescue. At SpendEdge, we offer a range of services including but not limited to category level spend analysis, tail spend management and supplier benchmarking. These expansive range of procurement spend analysis services provide organizations with granular insights on sourcing and procurement activities and other spending trends. Moreover, spend visibility permits an in-depth analysis of past spend data for planning and devising strategies for the future.
To know how spend management software, spend analysis, supply chain management, and spend analytics can help your organization
