The modern Chief Procurement Officer (CPO) and procurement functions, in general, rely on a specific level of intelligence in order to not only drive more educated sourcing decisions, but also to paint a vivid picture of enterprise spend visibility. The ability to leverage spend data and spend intelligence to identify sourcing opportunities is a powerful benefit of the spend analysis process and the associated systems that automate it. The visibility and intelligence afforded by data deep-dives that uncover key spend patterns and trends can help to identify areas for supplier and spend consolidation and optimization, as well as categories that should be sourced or marked for potential savings. The data culled and refined by spend analysis efforts can also fuel long-term cost analysis and a deeper understanding of how complex spend categories and various commodities affect corporate finances and enterprise performance.
The ability to drive full visibility into enterprise spend is an attribute that not only unleashes procurement’s visionary expertise, but also propels the CPO to new and strategic grounds in regards to corporate forecasting, planning, and budgeting. Spend analytics, and the visibility it provides, can arm procurement teams with the insight and standing to become better collaborators with their functional peers and business stakeholders. And, more importantly, the underlying foundation of the Best-in-Class spend analytics initiative is frequently developed with automated tools and process standardization:
Thus, for enterprises seeking to drive optimal value from their spend analysis efforts in the new year, it’s important to remember these three things:
In this day and age, it should be codified procurement law that possessing a great understanding of and visibility into enterprise spend is better than not possessing these things. Procurement teams that take no action towards mining and refining the spend data that gushes within enterprise systems are destined for mediocrity, if not failure. But unlike oil prospecting, drilling for spend data is a low-risk undertaking. Many procurement teams, including a majority of the Best-in-Class, have used spend analysis to hit a sourcing and savings “well” of value that can generate royalties for many years.
Spend Analysis: A Primer for Beginners
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Digging Deeper with Next-Generation Spend Analytics
Advanced Sourcing and Procurement Technologies: Advanced Spend Analysis
How Source-to-Settle Solutions Manage (and Leverage) Big Data – Spend Analysis
Tagged in: Chief Procurement Officer, CPO, Innovation, Lists, Process, Strategy, Technology