Engagement Overview:
A leading healthcare industry player, offering dental care services was looking at devising a strategic approach for effective capital management. The client approached SpendEdge to leverage their expertise in spend analysis in order to transform their bottom line and bolster a strategic vision across their dental care business units. A detailed quantitative analysis of various categories within the supply chain was carried out to analyze spend data and develop an effective spend analysis framework.
About the Client:
The client is a well-established dental care services provider.
Business Challenge:
The dental care services provider was facing an operating loss of over 7 million, which resulted in a negative operating margin of 2.3%. As a result, they were looking at employing an effective approach to regain internal control of spend data.
How did SpendEdge Help the Client?
- Step 1: Identification and collection of relevant spend data
The first step involved the process of identification and gathering of spend data from different business units. The gathered information included accounts payable, general ledger data, and data from e-procurement systems.
- Step 2: Classification of the gathered spend data
Classification of spend data is the step that follows data collection and it involves the grouping of the collected spend data to standard categories. Classification codes are used to separate data and to make them distinguishable. Regardless of the classification standards employed the main aim of this step was to develop a spend data file with each spend category linked to a unique group.
- Step 3: Detecting the non-addressable spend categories
Since all the spend categories will not be available for spend optimization, it is essential for a company to identify categories which can be optimized. Some of the spend categories of the client which did not fall under the optimizable category included governmental charges and taxes.
This step revolved around the identification and segregation of addressable and non-addressable spend categories. Also, identifying and clustering addressable spend data into categories reflect how individual supply markets function and help create a link between the related spend categories and the associated supply markets.
- Step 4: Development of a tailored spend analysis platform
The spend analysis experts at SpendEdge devised a comprehensive approach that helped the dental care client to gain a holistic view of spend categories. It also enhanced spend visibility and helped drive overall savings by a considerable percentage. It also enabled them to turn their negative operating margins into a positive scenario.
Key questions answered in this spend analysis study include:
Benefits of the Engagement:
The solutions offered by SpendEdge’s spend analysis experts helped the client identify the spend categories that have the most potential for delivering benefits to their organization. This spend analysis engagement also revealed major issues of concern that affected the client’s overall profit margin.
The developed spend analysis framework enabled the dental care services client to enhance spend visibility across different supply chain categories. Our spend analysis experts also assisted the healthcare industry client in improving their spend management capabilities which, in turn, helped them drive savings.
Why is spend analysis essential in the healthcare industry?
There are substantial opportunities hidden in the spend data generated by typical spend management systems and spend analysis which enables organizations to extract valuable insights from raw spend data. SpendEdge’s spend analysis solutions are designed to offer greater visibility into the organizational spend data; thereby, enabling market leaders to visualize their spend patterns across business segments.
Moreover, our methodical approach to spend analysis tied with years of consulting expertise and technical proficiency can help convert raw spend data into strategic sourcing opportunities to drive savings in any multifaceted industrial segment such as the healthcare industry.
Our Findings:
In this spend analysis engagement we helped a dental care services provider enhance their spend management capabilities by devising a robust four-step spend analysis framework. Such an approach can also be adopted by other industry players to maximize the potential of their supply chain functions.
With healthcare industry leaders increasingly focusing on improving their spend management capabilities to maximize profits, it is also essential for them to redefine their strategies to sustain the competitive pressure. So, what are you waiting for! Turn your challenges into a competitive advantage by investing in spend analysis Today!
To know more about our spend analysis solutions for healthcare industry players
