• Overview

What is spend analysis:

Spend analysis is the process of understanding the intricate details of a company’s spending characteristics, such as the associated spend by business unit or cost center, suppliers, and products and services that companies purchase to run their daily operations.

Why do you need spend analysis:

Our reasoning is simple: in order to source effectively, you need to build a useful spend map as a first step.

Spend analysis forms the foundation for more effective procurement. It can be applied to unlock cost-saving opportunities and gauge organizational  synergies. It is the enabling factor for Category Management, Strategic Sourcing and  Supplier Relationship Management and can be used to realize and monitor ongoing cost savings resulting from the effort.

The granular data obtained enables you to:

• analyze actual versus planned expenditures
• focus on high spending business units where cost-reduction opportunities can be realized efficiently
• at the commodity level, standardize product specifications and negotiate aggressive pricing
• curtail maverick spend
• reduce total spend per commodity category

In addition, management teams can present the results of spend analysis to suppliers in order to show their annual aggregate spend and make a case for preferential treatment.

• Working with you:

Purchasing Practice will:

• work with your data
• family your vendors
• map your spending into a useful Commodity hierarchy
  

We provide spend transparency to our customers as part of our broader service offering, and this data can then be utilized to perform an opportunity assessment on the mapped data, pointing out potential areas for savings.