What is Procurement Spend Analysis?
Spend Analysis
What is Procurement Spend Analysis
Procurement Spend Analysis
Procurement Spend Analysis aims to provide procurement with insights using historical spend data, that form the basis of strategic and tactical sourcing decisions, protect supply, and deliver value for money. Aligned with company objectives, procurement spend analysis provides, clarity, spend visibility, and sourcing framework, that aims to create a competitive advantage. To achieve this bespoke Spend Analytics Software is used.
Procurement Spend Analysis Explained: Video (3mins)
Procurement Spend Analysis Video
Procurement Spend Analysis Objectives
Most procurement leaders have a set of KPI’s and business commitments, they need to deliver on. Spend Analysis provides them with the company spend profile, the following list shows the context in which procurement leaders are measured and why spend analysis is a key element.
See Procurement Objectives list here:
Cost Leadership
Cost Management
Value Delivery
Governance & Compliance
Operational Efficiency
Supply Chain Innovation
Responsible Sourcing
Procurement executives and sourcing teams rely upon spend analysis, to provide a solid data foundation, that is trusted, accurate, and aligned to company objectives. Procurement Spend Analysis is a critical process, that allows the business to be more transparent, to track, measure, and leverage the supply chain spend data.
The Process of using Historical Procurement Spend Data, Aligned with Strategic & Tactical Sourcing, helps Procurement Protect Supply, Deliver Value for Money. Procurement Spend Analysis Provides Clarity, Spend Visibility.
A Framework for a Procurement Competitive Advantage, by Creating Spend Baseline & Spend Profile.
Procurement Spend Analysis Outcomes
Spend Analysis seeks to provide procurement with Cost Leadership.
Cost Management aims to Protect Assets such as Inventory and Cash.
Cost Management helps deliver Cost Savings.
Spend Analysis Value Delivery helps improve Profit and EBITDA.
Procurement Governance & Compliance,
Authorized Spend or Delegated Authority Level with Improved Sourcing Knowledge.
Process & Transaction Efficiency, Tail Spend Consolidation, reducing suppliers and transactions to be more efficient.
Supply Chain Innovation
What Process Improvement, What Yield Improvement, Spend Analysis shows the Sourcing Landscape and make sourcing Decisions to fit Company Roadmap.
Spend Analysis helps the Company achieve its Corporate Objectives, with Risk Mitigation, Social Value & Social Responsibility, Ethical Sourcing, Minority & Diversity Sourcing are all derived from good Spend Analysis. Procurement Spend Analysis is the Foundation for Effective Procurement Sourcing.
Frequently Asked Questions
Procurement Spend Analysis
Q1. How does Spend Analysis Work?
Spend Analysis works by taking historical spend data, classifying it, transforming and sharing it with procurement category managers, spend analysis software and spend dashboards are created to visualise, provide clarity and spend visibility.
Q2.What is Tail Spend?
Tail spend is referred to as long tail, typically made up of the bottom 20% spend value and makes up roughly 80% of the total supplier base. Spend Analysis, seeks to highlight and make recommendations that can reduce or eliminate low value spend items.
Q3.Procurement Risk?
Procurement risk can take many forms, supply risk being the most dominant risk. Creating a spend analysis process, highlights the total supplier base and by creating a template for risk assessment, this can be incorporated into the spend analysis process.
Q4.Procurement Value Delivery?
Procurement Value Delivery, is the process of creating the correct sourcing in environment, that helps procurement, deliver value for money, deliver the correct goods at the correct time at the correct quality and cost.
Q5. What is SRM?
SRM is short for Supplier Relationship Management.
What is Accelerated Insight ?
Accelerated Insight is a spend analytics software, that takes raw spend data, organises quickly it into a Spend Analytics Dashboard. Agile process design which requires minimal input from Procurement, designed to take Data to Dashboard in Minutes*.
A budget friendly spend analytics software and solution, that combines data science, business intelligence with procurement subject matter expertise. Built with purpose, to provide a future proofed, robust, Spend Analytics Software Solution.
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Spend Analytics Software - Video YouTube
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What is Procurement Spend Analysis