Here are the steps that can help you conduct your Spend Analysis in a better way. 

“Without big data analytics, companies are blind and deaf, wandering out onto the web… like deer on a freeway.” Geoffrey Moore

Step One

Identify sources

Identify all the sources available for your spend data, from all of your spend analysis departments, plants and business units. This includes accounts payable, general ledger, pcard, eprocurement systems, etc.

Step Two

Consolidate your data

Gather and consolidate all of your spend data in to one central database. This can be difficult if your data is in different formats, different languages and different currencies, however there are programs available specifically designed to accomplish this.

Step Three

Do some cleanup

Cleanse your data. This includes finding and correcting errors in descriptions and transactions, as well as standardizing the data for easy viewing.

Step Four

Organize your suppliers

Group, or link, your suppliers. Purchases made from IBM, IBM Corp., or Cognos should all be grouped together, since they’re the same supplier.

Step Five

Categorize your Spend

Whether you use UNSPSC, eClass, or your own company-specific categories, you need to be able to determine where your money is being spent. Office supplies, marketing travel, legal, direct and indirect spend should all be categorized appropriately.

Step Six

Analyze your Spend

Ensure that you have negotiated the best contract deals per supplier now that all of your spend is identified per supplier. Ensure that all of your buyers are purchasing from preferred suppliers. Reduce the number of suppliers per category.

Step Seven

Repeat

Performing a spend analysis once is a great start to identifying savings, however you need to continually update your data to ensure that contract terms are being adhered to, that buyers are purchasing from preferred suppliers and that savings opportunities are being identified.


See how Sourcing Force helps businesses automate their spend analysis

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