Tag: spend analysis data

Data Analytics

SpendEdge Webinar on 7th and 8th Feb – Is advanced analytics shaping the way procurement teams will look at data?

The procurement department is considered to be the backbone of any business – and even though for many years, the procurementyatheesh department functioned more or less the same way, the new wave of digital technology has led to a radical shift in that thinking. The rapid development of digital technologies has changed the business world altogether and is expected to grow at an unprecedented rate. So it is entirely possible that the procurement teams will be dealing with new sets of digital opportunities. The rapid evolution of data analytics capabilities has enabled companies to store and process a large volume of data to generate relevant business insights in real-time. Such insights provide valuable information to the procurement teams, which help them make smart decisions on spending, managing suppliers, and designing better strategies. In an era that is fiercely competitive, the use of data analytics in procurement functions becomes essential to gain a competitive advantage. In a few years, analytics in procurement will not only be a matter of gaining a competitive edge, but also a matter of survival.

What are the opportunities for advanced data analytics in the field of procurement?

sanyaFor a long time, businesses have been reliant on intelligence systems to process historical information and identify the current trends in the business. The capabilities of those systems were limited to the point where they could only help out with basic forecasting. However, data analytics has and will continue to have considerable implications in the field of procurement. Historical data can be used to generate meaningful insights and propel strategic business decisions. Big data and advanced data analytics can also enable automated P2P procurement, predictive strategic sourcing, and establish a proactive supplier relationship management strategy. The rapid evolution of the IoT will only exacerbate the vision of a fully automated future, moving procurement teams away from small, repetitive tasks to tasks that are more strategic in nature.

Conducted by SpendEdge’s procurement experts, this webinar on the 7th & 8th of Feb will cover the following:

  • What are predictive, prescriptive analytics, and advanced data analytics?
  • Explore how predictive analytics helps achieve efficiency in the procurement process lifecycle
  • Key non-procurement areas where advanced analytics could add significant value
  • Insights on successfully setting up a best-in-class advanced analytics strategy

emea audience

NA Audience

Spend Analysis Data

5 Surprising Uses of Spend Analytics Data

Organizations are working hard to increase their savings on their hard-earned dollars. The process of savings starts by analyzing when and where you are spending all your money. Analyzing your spends across different categories, processes, and suppliers give you a pretty fair idea where you, as an organization can improve the overall savings. A consolidated and accurate spend data collected fromSE_Demo2 multiple sources allows procurement teams to perform spend analysis which can provide insights on overall spends and explore areas where savings is possible. So the question arises, once you have the spend analysis data, how can it be useful to the organization?

#1- Increase Savings

In order to maintain profitability, organizations are stressing their procurement teams to deliver savings. Profitability increases when prices are increased or cost-base is reduced. Since product prices are more dependent on the market, companies are focusing on cutting down costs to drive the company profits. Spend analysis can help identify savings opportunities that usually aren’t so obvious.

#2 – Manage Maverick Spends

Maverick spends that does not comply with the rules set by company’s pre-established procurement policy can cost the company money in the long run. Some purchases have to be made urgently or may be insignificant to merit the time and energy to complete the process. Usually, such spends are forgotten in the long run and continue to bleed money for the organization. Spend analysis can help prevent such maverick spends by identifying anomalies such as non-compliant purchases with the supplier, spends with non-contracted vendors, and spends across multiple suppliers without any contract.

#3 – Improving Supplier Relationship

Your suppliers will have a good idea on your spend with them across different items than you. This is because your vendor values customer relationship. However, spend analysis provides you detailed data on spends and expenses with every vendor. It helps an organization to identify suppliers that are crucial to the organization so that a better supplier relationship can be maintained. Additionally, it can also help companies to rationalize their supplier base.

#4 – Managing Risks

It is not uncommon that an organization usually deals with a single vendor over a number of years. However, being over-reliant on a single vendor can become risky, if they fail to deliver as promised or are out of business. The organization can be severely handicapped if such instances occur. Spend analysis data monitors what commodities and components are bought from each supplier which helps them to know financial, legal, operational, and geographical risk exposure for each supplier.

#5 – Ensure Compliance

One of the most complicated task for a procurement manager is taking care of compliance issues. By analyzing historical spend of the organization, issues around contract compliance can be disclosed. Increased visibility into spend data can thereby improve contract and regulatory compliance.

For more information on the use of spend analysis data, spend analysis reports, compliance, maverick spends, and spend visibility:
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Related Articles:

Transportation procurement

Leveraging Spend Analysis Solutions to Reduce Procurement Lead Time and Purchasing Spend

Category Overview

Through spend analysis, firms can gain greater visibility and valuable information on the amount of money spent. Additionally, the data obtained from spend analysis can help an organization make informed decisions about how their current processes can be improved. Moreover, since cost effectiveness is one of the major goals for any company, implementing a spend analysis solution will offer insights to organizations about their expenditures and procurement activities. This, in turn, results in a lower total cost to procure goods and services. As a result of such advantages, many organizations have started opting for spend analysis studies to improve their process efficiency and cut down on overall costs.SE_Demo2

The Procurement Pain Point and Insights Offered

A global automotive manufacturing company with offices spread across the globe wanted to reduce procurement lead time and material spends with the help of a spend analysis study. The automotive manufacturing company’s processes, data or systems related to customers, partners, products, vendors, and employees were not standardized. As a result, the client wanted to gain insights on achieving a single platform to integrate all of their purchasing activities. Additionally, they also wanted to streamline their procurement performance by cutting down their inventory costs, material spends and wastages in inventory stock.

The spend analysis professionals at SpendEdge carried out a comprehensive research methodology. This in-depth research included primary and secondary research to cater to the specific category requirements of the client. During the course this spend analysis study, the client was provided with a better visibility into the procurement data, enabling them to capture the spend against products, services, commodities, and suppliers. Such an insight helped the company reduce costs and strategically improve supplier relationships. Additionally, SpendEdge introduced the concept of self-service for the client, which streamlined and automated workflows – enabling employees to manage online shopping carts easily.

Key questions answered in this spend analysis study include

spend analysis

Business Outcome

The engagement helped the client improve procurement efficiency and reduce procurement lead-time with the automation of different procurement activities. Additionally, the client was able to increase the visibility of in-transit inventory and improve supplier delivery performance and material planning.

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Market intelligence

Leveraging Spend Analysis to Boost Savings and Realign Supply Chain Organization Structure

Category Overview

Spend analysis is the method of identifying, gathering, grouping, categorizing and analyzing an organization’s spend data with the primary focus on decreasing the procurement costs and improving efficiencies.  This is achieved by making use of real-time data and analytics, which help envision all the data sets to make better sourcing and supplier decisions. This helps reduce cycle time, improve compliance, and recognize maverick spend patterns. Owing to such benefits, many automotive firms have started opting for spend analysis studies to cut down the costs and improve process efficiencies.

The Procurement Pain Point and Insights Offered

A leading electronics manufacturer with offices spread across the globe wanted to gain quick savings and realign their supply chain organization structure for indirect categories. As a result, the client wanted to develop a comprehensive global spend assessment of their indirect spend. Additionally, the client also wanted to identify and assess the key suppliers in the market and analyze their spend patterns. Furthermore, they also wanted to identify better strategies to enter into a contract negotiation with their current suppliers.SE_Demo2

The spend analysis experts at SpendEdge followed a blended research methodology approach, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client. During the course this study, the client was offered reports that helped them plan, prioritize, and implement several sourcing initiatives within the supply chain organization and across multiple global plant locations. This approach enabled the client to meet the objective of identifying huge saving opportunities through supplier aggregation and determine the categories of indirect spend to focus upon. Furthermore, the client also gained insights on superior strategies to enter into a contract negotiation with the current suppliers.

Key questions answered in this spend analysis engagement include

Spend Analysis

Business Outcome

The spend analysis study helped the client devise detailed sourcing strategies and realize huge cost savings for indirect spend. Additionally, they achieved quick savings and process efficiencies for categories such as office supplies, computer peripherals, and MRO.  Furthermore, the client was also able to identify and assess the key suppliers in the market and analyze their spend patterns.

Want to know more our spend analysis solutions?

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Automotive industry

Spend Analysis Study Helps a Leading Automaker Reduce Procurement Costs in APAC

Category Overview

Over the last decade, the global automotive industry has undergone a tremendous transformation in its history. Although the European and North American regions are the largest markets, the APAC region is witnessing an increasing share of global automotive sales and is the only market, which is expected to witness steady growth in the coming years. However, the major reason behind the market’s sluggish growth in this region is the social and political instability witnessed across this region. As a result, many automotive firms have started opting for spend analysis studies to improve process efficiency and cut down the costs.

The Procurement Pain Point and Insights Offered

A leading automaker specializing in manufacturing automotive components wanted to not only reduce the current amount spent but also wanted to gain insights on the rising importance of global markets. Additionally, the client also wanted to identify the key suppliers in the market and analyze their spend patterns. Furthermore, the client also wanted to identify superior strategies to enter into a contract negotiation with their current suppliers.SE_Demo2

The spend analysis specialists at SpendEdge carried out an in-depth two step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client. During the course this spend analysis engagement, the client was able to identify all the available suppliers, mainly in South Korea and China with a request for quotation (RFQ) package that outlined the volumes, projections, and partnerships. Additionally, the client gained insights on the spend pattern analysis of the other key suppliers and was able to develop a superior strategy to enter into a contract negotiation with the current suppliers.

Key questions answered in this spend analysis case study include

Capture3

Business Outcome

The spend analysis study helped the client identify the key suppliers in the market and their spend pattern. Additionally, the client obtained an understanding of the global supply capabilities and achieved their goal of supplier diversification to address the increasing importance of the Asian markets.

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Supply-Chain-Risk-Assessment-min

SpendEdge helps a Fortune 500 Medical Device Company Improve Savings Through its Spend Analysis and Benchmarking Services

Category Overview

The medical devices market will witness significant opportunities for growth in the coming decade primarily due to the introduction of innovative devices in the market and by the demand generated by illnesses related to the aging global population. However, the medical device companies are required to exhibit a high level of cost-effectiveness for the products owing to the tighter regulatory and reimbursement policies, particularly in the emerging economies. As a result, many medical device companies have started opting for spend analysis and benchmarking services to identify and optimize their spend areas to maximize profits and streamline processes.

The Procurement Pain Point and Insights Offered

A fortune 500 firm with offices spread across the globe wanted to gain insights on the category and supplier pattern analysis. They also wanted to find out the key vendors in the market and gain insights into their spend pattern. Furthermore, they also wanted to gain an understanding of the superior strategies to enter into a contract negotiation with the current suppliers.

The spend analysis analysts at SpendEdge followed an in-depth two step research methodology, which included primary andRequest Free Proposal secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client. During the course of this assessment, the client gained insights on the ways to decrease procurement costs, improving efficiency, and monitor compliance. Additionally, the client could identify the vendors based on parameters including geographic coverage, qualitative assessment scores, previous experience with the vendors, and product development and tooling costs. This spend analysis assessment also helped them understand the spending pattern other key suppliers. Furthermore, the client discovered a better negotiation strategy to enter into a contract negotiation with the current suppliers.

Business Outcome

The spend analysis and benchmarking assessment helped the client identify the current state of spend and an intermediate term spend strategy. Additionally, the client was offered suggestions on new ways to improve their process efficiency. SpendEdge’s spend analysis and benchmarking assessment also provided insights on the possible ways of improving the savings by identifying and optimizing spend areas.

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spend analysis

Spend Analysis Data and Intelligent Business Decisions

The impact of efficient spend analysis in influencing business strategies is something to which companies need to wake up to. It is not just limited to keeping a track of the organization’s expense pattern. Rather it has more to do with drawing meaningful insights and patterns in the data, to help build effective sourcing plans for companies.

Ways in which spend analysis data influences business strategies

 

  1. Enhancing processes

Proper synchronization of work flow and different processes not only makes the work environment seamless, but also plays an important role in cost-cutting. Right from consolidation of invoices, to having better procurement systems at place, spend analysis enables you to identify the loopholes in the system as well as zero-in on the best possible opportunities. This way, an accurate spend analysis data plays a rather critical role in enhancing the workplace processes, as well as generating better return on investment (ROI).

  1. Decrease in maverick spend and increase in savings

Maverick spend is a major pain point for many organizations. And somehow, despite having the best of the plans in place, these expenses seem to be just piling up. However, with the efficient use of spend analysis data, one can easily identify situations which do not have proper contract in place as well as differentiate between non-contracted vendors.

Similarly, with increased focus being given to better services at lesser costs, it has become rather tricky to have a foolproof plan on better savings strategy. The sharp data generated through spend analysis helps you identify prospects, which you did not even know existed.

  1. Better risk management and recovery of over payments

Often it has been noticed that organizations become over-dependent on a supplier. Though at the face of it, this whole scenario looks quite a natural process, the fact is that the organization suffers from this kind of over-dependency. Not only do you stop checking on better and more cost-effective options, but there are good chances of the organization running out of critical goods and services. Recovery of over payments is another major pain point for stakeholders. A through adherence to the spend analysis data helps not only in identification of better suppliers, but also decreases the incidence of over payments.

To know more about role of spend analysis data, best practices, best spend analytics tools, spend analysis software, and spend analysis process  in intelligent business decisions:

 

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