What Is a Spend Cube ?- Definition
Spend Cube is three dimensions of spend data—Suppliers, Corporate Business Units, and Item Categories—the spend cube is a graphic representation of spend analysis output.
Understanding Spend Cube
The spend cube describes a particular multidimensional review of spend data. At least three dimensions are usually reviewed: which sub-categories or variants that are purchased across the organisation, and in what values; which stakeholders or departments buy the category, and in what values; and what the spend is with different suppliers, and in what values.
Elements Of Spend Cube
The spend cube is a powerful tool for any procurement professional. It should not be underestimated and should be reviewed regularly. Without this tool any category manager is unable to approach their category in a professional manner and any head of procurement will be unable to effectively resource their team.
A spend cube (with full categorisation) has provided clarity on the following:
- The total spend value for the business
- The total spend value in scope (that which procurement can influence)
- Direct/core and indirect/non-core spend levels
- The spend value per category
- The number of suppliers per category
- The spend value with each supplier
- Supplier spend and changing trends (monitored monthly, quarterly or annually as required)
Explore Additional Resources to Know More
The Future of Procurement: Modernizing How Companies Buy
The future of procurement will focus on improving business process continuity between departments with supporting technology to drive cross-department workflows and automation, driving a significant impact on the cost and time efficiency of how S2P is executed.
Sourcing and RFP management in New Normal
To ensure reliable sourcing operations in any pandemic situation like COVID-19, organizations can leverage RFP software to build a new supplier base, improve communication of procurement needs to external suppliers, and manage spends.
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