Top Three Spend Analysis Best Practices
Organizations must adopt spend analysis best practices as it is key to achieving procurement and sourcing success. Majority of the companies make their decisions based on inaccurate, poor, and incomplete data obtained through unreliable sources. As a result, businesses were unaware of how much they spend on which products, thereby relying on guesswork and intuition. […]READ MORE >>
Organizations must adopt spend analysis best practices as it is key to achieving procurement and sourcing success. Majority of the companies make their decisions based on inaccurate, poor, and incomplete data obtained through unreliable sources. As a result, businesses were unaware of how much they spend on which products, thereby relying on guesswork and intuition. Today, organizations have realized the importance of spend analysis to increase the efficiency of their procurement function. Chief procurement officers (CPOs) and other procurement professionals must leverage these spend analysis best practices to ensure an efficient and effective spend management program. By adopting spend analysis best practices prevalent in their respective industry, businesses can gain insights that help organize, plan, and manage procurement and sourcing decisions in the organization’s supply chain. Spend management is gaining momentum in enterprises to drive continuous improvement in supply management, thereby enabling strategic decision making.
#1 Spend Analysis Best Practices – Audit Spend Management Capabilities
One of the most important spend analysis best practices that organizations must adopt is to conduct an audit of the businesses spend management capabilities and infrastructure. Businesses can begin with understanding and creating a spend data system map, check the completeness, accuracy, and depth of the available data, conduct a company-wide spend analysis, and gain a clear picture of existing data management processes. Organizations must also assess their internal capabilities and skills, enlist the areas that need to be augmented, and finally ensure that data is accessible to everyone involved in the decision making process.
#2 Spend Analysis Best Practices – Detailed Spend Classification
Organizations must ensure data cleansing and classification with the help of spend analysis software or tools. These spend data management solutions facilitate extraction, classification, and analysis of spend data, thereby automating and streamlining current processes. Furthermore, businesses must ensure a detailed classification of the spend data, thereby enabling visibility and comparison across supplier and commodity attributes. A detailed spend classification provides the organization with deep visibility of the total spend, thus facilitating strategic sourcing decisions based on accurate and actionable insights.
#3 Spend Analysis Best Practices – Leverage Supply Intelligence
One of the spend analysis best practices for organizations is to leverage business and supply intelligence to obtain a clear picture of the company’s total spend and compliance standards. Enterprises can also enhance and enrich their spend data with the insights gained through supply intelligence, thus leveraging the insights to make trade decisions. The external market and supply intelligence offer necessary actionable insights that help businesses to optimize sourcing decisions and inventory strategies.
To know more about spend analysis best practices and supply intelligence
View the latest case study from SpendEdge to know how a better and a smarter spend analysis solution can benefit your organization to reduce costs and improve process efficiency.
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