Spend Analysis Technology
Spend Analytics Technology is a form of software that helps the procurement or finance teams to collate and present vast amounts of data in a meaningful way. Data is often distributed between a large number of financial and ERP systems, across many different geographical and business entities. Purchasing activity itself may be widely distributed and can include significant unofficial, ‘maverick’, or non-compliant activity.
Understanding Spend Analysis Technology
Spend analysis technology allows you to take a closer look at where your money is going in the scheme of procurement management. Even if you have a tight budget, you look regularly; every company has rogue spending, unaccounted for, and indirect costs.
It is much easier to get the big picture when you have to spend analysis reports that are refreshed regularly in front of you or have software with a procurement spend analysis dashboard. You indeed have to know what data to have and where to plug it in when you’re using spend analysis technology, but it’s a vital tool that can save your company both money and time.
Why is Spend Analysis Technology important?
Automated Spend Analysis Technology connects with procurement spend data to create a company-wide spend profile by gathering, cleansing, classifying, aggregating, and analyzing company expenditure. The process is split into two stages, spend data preparation and spend data visualization. Its purpose is to provide actionable insights, spend visibility, compliance, and procurement cost savings. In addition, Spend Analytics Technology harnesses various data sources such as purchase orders, accounts payable, and discretionary expenses.
Spend Analytics Technology 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 a sourcing framework to create a competitive advantage.
Spend Analytics Procurement Technology
Spend Analytics Technology provides companies a view of their external supplier spend, with the aim of improved sourcing, reduced costs, and waste elimination.
- Spend Analysis- Turn Raw data into Tangible opportunity analysis with a leading Spend Classification platform and process.
- Cost Saving Opportunities- Tail Spend and Category management Opportunity analysis with rapid dashboard and supplier/category spend reporting.
- Spend Forecasting- Ability to forecast Spend, delivery, and track savings.
- Resource Improvement- Unified platform reduced downtime, improved preparation for meetings, more time spent on doing vs. data preparation.
Spend Analysis and Visibility
This is a fairly obvious benefit of spend analysis technology, but insight into spending is vital for cost savings opportunities. Visibility offers a clear look into procurement spend patterns, and quite often, you’ll see for the first time which departments or regions are either spending too much or with unapproved suppliers or both.
Supplier Performance and Management with Spend Analysis Technology
Once you begin to use spend analysis technology, part of the spend analysis process is identifying and properly tagging preferred suppliers and related spend. Eventually, your spend will be segregated into “with” preferred suppliers or not, as well as “on” or “off” contracts.
Thus, with properly deployed spend analysis technology, you should have insight into the spend that is properly under management and the spend that has room for improvement. As you’re evaluating spend analysis software companies, you may want to consider a best-of-breed point solution versus a full procurement suite to ensure you get all the features and functionality you require. Typically, spend analysis software will be within procurement software solutions or a suite.
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