Tag: spend analysis best practices

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Spend Management Solutions: A Holistic Guide for Procurement Companies

“Only a truly integrated spend management solution can fetch value for your company and result in intelligent procurement.”

Limited supply chain visibility, poor supplier transparency, new regulations, spend creep, contract management, risk mitigation, and the growing need to do “more with less” are some of the key challenges that procurement companies face. Spend creep has become one of the biggest challenges for companies today as companies are spending extensively to stay ahead of the competitors.

Unnecessary spend happens when businesses buy additional items, products or services, from suppliers that aren’t needed. Also, it happens because of misguided bid management process, weaker supply chain management systems, and lack of auditing and spend analysis. Therefore, procurement professionals need to have the right spend management solutions to tackle these challenges efficiently and effectively.

At SpendEdge, we understand the impact that spend management solutions can have on your business. And to help companies identify latent opportunities to devise strategic plans to minimize their expenditure in every category, our team of experts have provided a comprehensive guide to spend management.

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Why is Spend Analysis a Necessity for Reducing Facility Management Costs?

The market for facility management services is a multi-billion dollar industry in the U.S. alone. Facility management involves the integrated management of multiple and interdisciplinary technologies, personnel, systems, and processes. The ultimate goal of facility management is to promote an efficient and collaborative environment to meet and fulfill the key objectives and mission of an organization. However, this requires business owners to invest in strategies that are going to allow their facility management personnel to work with large sets log compliancy information, asset maintenance information, and every process through the facility management lifecycle. One of the primary challenges involved in facility management is that as more data points enter a facility, it becomes harder to ensure that accurate asset maintenance records are kept. Due to such factors, companies in the facility management industry are unable to reduce risks and increase operational control.

Key facility management challenges

Efficient facility management involves constantly tackling critical issues every day in the face of a host of obstacles. They are also responsible for bringing together a multitude of distinctive elements. Diligence and flexibility in handling facility management not only defines their success but also that of an entire company. Both large and small businesses must devote a considerable amount of their capital and energy to ensure their facilities are properly maintained and are prepared to meet the challenges of the future.

Cost management

Every instance of demand placed in a facility management enterprise has a cost associated with it. This includes costs incurred on repairs and maintenance, hiring of staff, inventory and supplies, and safety and security. We at SpendEdge, help clients in facility management organizations track cost expenditures, including detailed historical analysis, to allow for proper administrative reporting and reduction of operational costs.

Resource management

Another key facility management challenge is the need to rely on many resources to operate the facility efficiently. This includes both full and part-time staff. It also requires different types of service providers. Furthermore, due to limited budgets, facility management teams are expected to deliver more at lower costs. In this case, facility management companies are left with no choice than to identify their optimal staffing requirements and maintain a constant flow of communication between the team so that they are aware of how to increase the overall productivity and improve efficiency.

Meeting compliance guidelines

It is essential for companies to ensure the statutory regulations for managing their documents. This requires a process to ensure that data is stored correctly. In order to remain compliant, it is also important to stay updated on the legislative changes. Facility management professionals often face problems associated with inadequate record keeping that do not meet the expected compliance standards.

 

One of the best ways to resolve facility management challenges is to bring in a professional and competent solutions provider to help you carry your load. SpendEdge has been helping facility management professionals across the world to build strategies that increase their profits while staying within the budget. Contact us today!

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Cutting facility management costs: What businesses must do


As businesses face the need to utilize state-of-the-art infrastructure to remain competitive, controlling facility management spend becomes more important than ever before. Strategic planning is critical to align capital spending with budgets and ensure proper allocation of resources in facility management. While budgets are typically controlled by individual departments within the organization, there are certain steps every facility management professionals can take to contain costs. Here are five ways facility management can control the overall spend:

  • Purchase Pre-owned, Refurbished or Rental Equipment
  • Preventative maintenance of existing equipment can help reduce operating expenses and create a safer work environment
  • Research the supplier and the equipment through product reviews and testimonials for optimal prices and service.
  • Organize data and analytics to gain better visibility of expenses across the organization and enable the allocation of resources in the most efficient manner
  • Leverage spend analysis to get all the possible benefits from the company’s current spend cube

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How Spend Analysis Helped a Leading Dental Care Provider Regain Internal Control of Spend Data – A Healthcare Case Study by SpendEdge

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:request proposal

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 datarequest proposal

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.

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Key questions answered in this spend analysis study include:

Dental care


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.Request Demo

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

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Spend Analysis: How SpendEdge Helped a Renowned Automotive Components Manufacturer Classify Spend Based on their Priorities

Overview of the Automotive Components Industry

The automotive components space has doubled in the last five years with the improving economic conditions and rising per capita income levels. Also, the growing demand for new automobiles among the APAC region is contributing to the growth of the automotive components space. Moreover, leading organizations are planning to invest highly in research and development to manage the rising costs while staying competitive on the prices. Factors influencing the growth of the industry over the years include:

  • Changing market dynamics: The automotive components space is subjected to frequent changes in the market dynamics, owing to the increasing focus on raising fuel efficiency. With the altering preferences of the consumers, manufacturers are facing challenges in adjusting their strategies to thrive in this environment. Moreover, government regulations to curtail the carbon emissions are also compelling businesses to re-define the current operations and enhance the production efficiency.
  • Innovations: In the recent past, the automotive space is witnessing massive innovations to meet the consumers growing demand for efficiency at comparable lesser costs. Moreover, the prevalence of car ownership has declined with the relative advances in technology such as autonomous driving. The presence of embedded technology such as sensors is exponentially increasing which further transforms the way how the automotive industry is functioning.

To promote the growth of innovations and accordingly allocate their resources to meet the business requirements, leading businesses in the automotive components space are leveraging spend analysis solution.

The Business Challenge and the Solution Offered

The client, a renowned automotive components manufacturer, was facing challenges understanding the current fluctuating market scenario and gaining adequate knowledge on the spending patterns. The client wanted to leverage spend analysis solution to gain visibility into the current state of spend and strategize effective ways to curtail maverick spend. The primary concern of the client was to manage the organizational spend and identify critical saving opportunities in an easy manner. Moreover, the automotive components manufacturer wanted to classify the spend based on their priorities and monitor fluctuating commodity prices.

To identify and calculate the market trends of commodities, a robust methodology was carried out by SpendEdge’s spend analysis experts. The methodology comprised of interviews and discussions with prominent stakeholders in the automotive components space. In order to generate actionable savings from spend reports, the experts also compiled information from reliable sources such as trade shows, government bodies, and company presentations.

The spend analysis solution offered by SpendEdge helped the automotive components manufacturer gain insightful analysis into the buying behavior of the customers. With the spend visibility, the client was able to identify the potential bottlenecks in terms of the savings leak, prices vary, and purchasing overlaps and make informed business decisions. Moreover, the solution also helped the client compare the spend with the industry peers and achieve sustainability into their spend patterns.

Fundamental questions answered in this spend analysis include:

Sp- spend analysis


The Results

The spend analysis engagement helped the client develop easy-to-use spend analysis dashboards to monitor the KPIs with that of the competitors. The solution also helped the client optimize their spending process to identify the latest saving opportunities in the supply chain process. Through a reliable spend analysis engagement, the client was able to build a short, and medium term spend strategy and improve process efficiency while improving the saving opportunities.


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The 4C’s of Spend Analysis – Saving Your Hard-Earned Dollars

Every organization should thoroughly monitor where their hard-earned dollars and cents are spent. A proper tracking and monitoring of spends across categories increases the operational efficiency of the organization and improves the success of subsequent sourcing strategies. Penetrating, insightful, and actionable analysis of spend provides a strong base to devise effective sourcing plans. Organizations can opt for spend analysis solutions which will cleanse, validate, enrich, classify and report the spend data across spend categories and thereby generate accurate information and actionable insights.Contact US

4C’s of Spend Analysis

Spend Consolidation

The first essential step for a proper category spend analysis is to identify all data sources to collect spend data including accounts payable, pCard, eProcurement systems, and general ledger. Large organizations running on multiple ERP platforms should consolidate their data to comprehend the volume and costs associated with spending.

Spend Classification

After gathering one consolidated spend data into one central database, it is essential to standardize the spend data to facilitate the grouping and classification process. It is essential to correctly attribute each spend such as office supplies, legal, marketing travel, direct and indirect spend to their right category so an accurate analysis can be performed later. This process also helps in identifying duplicate and maverick purchases across different categories to ease the supplier negotiation priorities.request proposal

Spend Collaboration

Organizations can identify opportunities to consolidate suppliers based on similar purchases. Having a complete spend visibility of each category paves the way to find the best supplier for the given category in order to gain better value from a single supplier. Such synergies are very crucial in maintaining a long-term supplier relationship which can be beneficial in the long run.

Spend Control

An extensive spend analysis provides comprehensive information and insights for a CPO to make informed decisions on their organizational spend. Decisions supported by spending data can significantly increase the operational efficiency and subsequently set benchmarks for the future. Additionally, organizations should repeatedly assess their spend data and improvise their spend strategy.

To get detailed insights into spend analysis tools, supply chain management, spend data, procurement services, category spend analysis and spend analysis in procurement request a free demo now

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Spend Analysis Study Helps a Major Chemical Firm Reduce Procurement Costs Across the Supply Chain

Category Overview

Globally, the chemical industry is very sensitive to pricing changes, owing to the rising need to curtail costs among the target audiences. To effectively keep track of the expenses, leading procurement organizations in the chemical industry have started leveraging robust spend analysis services. request free proposalIn the chemical industry, devising an effective spend analysis solution assists the client to gain accurate and actionable insights into the spend drivers; thereby, increasing saving opportunities. Furthermore, organizations can leverage the use of spend analysis to understand the spending patterns of the vendors and identify suppliers that provide optimum value to the producer.

With years of expertise in offering a plethora of services, SpendEdge’s spend analysis experts help clients identify the suppliers and the areas providing the greatest sourcing opportunities for spend reduction. The solution offered also helps the clients to standardize, normalize, and enrich the spend information and identify exceptions. Furthermore, with the aid of SpendEdge, clients can uncover the strategic sourcing opportunities and allocate resources accordingly.

The Procurement Pain Point and Insights Offered

A renowned client in the chemistry industry was facing predicaments reducing procurement costs across the supply chain. The client wanted to understand the spend pattern and the category and supplier pattern analysis. Furthermore, the client wanted to gain strategic insights into the current state of spend to devise an effective short/medium term spend strategy.

To effectively assess and select suppliers, the client approached SpendEdge’s team of spend analysis analysts. SpendEdge’s team of analysts followed a blended approach comprising of interviews and discussions with leading stakeholders in the chemical industry. Furthermore, the client also aggregated information from various proprietary sources such as paid industry databases, company presentations, industry forums, and newsletter in the chemical industry.

After obtaining the complete information, SpendEdge’s spend analysis solution helped the client devise state-of-the-art tools and technology to provide comprehensive spend solutions. Also, the spend analysis solution helps the client cleanse, validate, enrich, and classify data, thereby delivering better-visibility in the spending solutions across the enterprise.

Key questions answered in this spend analysis study include

SP- spend analysis

Business Outcome

With the help of the spend analysis solution, the client was able to streamline their strategic sourcing plan, reduce maverick spend, and improve cost savings. Moreover, the client gained knowledge of historical and current market prices, aggregated spend by commodity, and increase visibility into their spending patterns.

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Spend Analysis Solution Helps a Consumer Electronics Manufacturer Identify Major Indirect Categories

Category Overview

In the recent years, the spending on electronic devices has reached its peak with manufacturers offering a differentiated set of products at reasonable prices. Also, with the recent increase in technological advances and availability of a wide array of choices, the consumer’s spending patterns have changed. To understand the dynamic consumer spending patterns, manufacturers in the consumer electronics landscape have started depending on robust spend analysis solutions. In the online electronics sector, effectively leveraging spend analysis solution aids organizations to identify the spending patterns among the consumers; thereby, helping in increasing the traffic. Furthermore, such solutions help organizations identify the loopholes in spend analysis in terms of the savings leak, varying prices, and purchasing overlaps.

With years of expertise in offerings services for a plethora of clients, SpendEdge’s spend analysis solutions can help the client identify the major factors influencing the growth of the consumer electronics industry. Expanding middle-class population, changing lifestyle preferences, and growing inclination toward smart electronic devices are some of the factors affecting the adoption of electronics in the consumer electronics manufacturing space. Additionally, leveraging the use of spend analysis solutions will also help clients effectively compare the spending patterns with that of the industry peers.

The Procurement Pain Point and Insights Offered

Spend analysis is an indispensable part of any organization looking to gain a better visibility on the business’ expenses. Like several other players in the customer electronics space, a leading consumer electronics manufacturer was facing predicaments identifying the major indirect categories. The client wanted to analyze the spending pattern to meet the procurement objectives effectively. By identifying major indirect categories, the client would be able to gain an accurate, consistent, timely, and detailed visibility into the spending patterns. The client also wanted to identify savings opportunities to further enhance the overall decision-making process.request free proposal

To assess spending patterns and meet the requirement of the client, the spend analysis experts at SpendEdge carried out a blended research, which comprised of a two-step research methodology. The research methodology also comprised of primary and secondary research and an analysis of the leading stakeholders in the consumer electronics manufacturing space.

Through a comprehensive spend analysis solutions, the consumer electronics industry client was able to gain insightful analysis of the business’ behavior. Moreover, the spend analysis solutions offered by SpendEdge also helped the client to keep track of the spending trends and buying activities of the client. Also, the engagement further helped the client decrease procurement costs and improve their overall process efficiency.

Key questions answered in this spending analysis solution include

Comsumer electronics manufacturer

Business Outcome

The robust spend analysis solution offered by SpendEdge helped the consumer electronics manufacturer determine the current state of their spending patterns and further gain complete visibility into the spending behavior of the client. With the help of this engagement, the consumer electronics industry client was also able to identify the major indirect categories.

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Industry Best Practices Benchmarking Study for a Fleet Management Company

Category Overview

The fleet management industry is regarded as one of the primary industries in logistics and transport, driven by connected vehicles and smart transportation solution by various organizations. Over the years, this industry has seen an astonishing growth due to the higher efficiency and performance at reduced costs and a much-streamlined process. According to SpendEdge’s industry best practices experts, it has been noted that the tensions with procurement created by resource sharing, driver reimbursement, and life cycle costing are all affected by external market factors; thereby, challenging fleet management companies to cut down on costs. As a result, many fleet management companies have started adopting industry best practices studies to gain a list of diverse skill sets and establish themselves in this market space.

Moreover, the industry best practices studies offered by SpendEdge help fleet management companies adopt best-in-class sourcing and procurement strategies.

The Procurement Pain Point and Insights Offered

A leading fleet management company wanted to identify a list of the major competitor businesses and their key suppliers. Additionally, the client also wanted to implement a lean, scalable, best-in-class, and efficient procurement process and cut down costs. Furthermore, they also wanted to assess the sourcing and procurement best practices of peer group companies to serve their clients better.request free proposal

To cater to the specific category requirements of the client, the industry best practices experts at SpendEdge carried out a blended research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies.

During the course of this industry best practices study, the fleet management client was able to identify the key drivers for this procurement process transformation project, including organization design, technology, and optimization techniques. Additionally, the client was provided a list of the major competitor companies and their key suppliers to enhance their overall procurement process.

Key questions answered in this industry best practices study include

fleet management

Business Outcome

The industry best practices study helped the client implement a lean, scalable, best-in-class, and efficient procurement process. Additionally, the client was able to identify and discard the inefficient and unproductive processes across platforms. As a result, the fleet management client was able to cut down the overall cost.

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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. Today, organizations have realized the importance of spend analysis to increase the efficiency of their procuremenSE_Analystt 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

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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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