Getting the Right Start with Spend Intelligence
The ever-changing working environment forces businesses to adapt to new models, and employee behavior. As a result, monitoring and reporting on organizational spend have become more complex to track and to understand for the procurement professional. Organizations with the ability to analyze spend, can transform and remain agile in order to create a more adaptable business model. This is why we see more organizations turning to spend intelligence solutions to gain a better understanding of spend across their organization, and other spend activities.
Gain Better Insight with Spend Analytics
It remains essential to track current spend, utilize data, and monitor patterns to start optimizing your organizations spend. To that end, achieving Spend Intelligence starts with analytic insights. Spend analytics is the driving force of effective spend data management. Grouping insights into understandable and consolidated sources can only be done accurately, once data is collected, cleaned and classified. Spend analysis is regarded as the foundation of sourcing. Without the insights gained, executives cannot create an effective purchasing process. The insights discovered from spend analysis means an organization can strive for improved performance, improved visibility into corporate spend, compliance, and most importantly, cost savings. Insights allow real-time management reports with clear details that can result in stronger supplier-buyer relationships. Beyond leveraging analytics to understand your organizations spend, spend intelligence improves daily operations. Executives need to view a clear picture of how spend is being managed, and this is achieved when full spend visibility is achieved.
First Spend Intelligence, then Decision Making
Spend intelligence can identify and help eliminate any inefficiencies in your procurement process. That is why it is essential spend intelligence comes first when implementing a successful procurement strategy. For example, when utilizing spend analysis efficiently an organization can extract valuable information that allows strategic decisions to be made quickly. Executives can make assumptions, but insights offer fact-backed decision-making- that will help the organization align with its spend goals. Spend Intelligence is a method that successful procurement organizations use to proactively identify savings opportunities, manage risks, and optimize their organization’s buying power. Spend intelligence is important as it turns raw data, into usable, insightful information. The ability to deliver insights into an organization purchasing activities allows opportunities to reduce costs, and procure goods and services more efficiently. Spend intelligence helps address financial and non-financial performance commitments (such as supplier diversity etc.). While procurement rules get stricter across the board, spend intelligence produces actions that guide procurement teams to achieving spend goals. The value of spend intelligence allows procurement leaders to find collaborative, agile solutions that help them maintain a driving position that balances top line with bottom line targets – both short-term and long-term. The decision support needed to accomplish this comes from having comprehensive, accurate Spend Intelligence and a way to quickly take action on what’s best for the business. Connecting your Spend Intelligence to Procurement’s performance, especially while aiming for priority goals is practiced by successful procurement organizations.
The Spend Analysis Process
This multi-step approach is offering a basic overview of what a typical spend analysis process would look like.
- Gathering data: processing data into clean information to identify any gaps in spend, reveal opportunities for savings, and achieve supplier diversity or other organizational goals.
- Consolidate data: all your valuable data in one place. This is to help ensure your organization has the right amount of information, and all data gaps are filled.
- Categorize data: indirect or direct spend categories and then further categorized into different types of spend, e.g., software purchase.
- Analyze the data: evaluate the data, identify trends and patterns, and gain a better understanding of your purchasing habits, and if they align with the organization expectations.
- Implement course correcting strategies to keep the organization on track.
SpendHQ’s Spend Intelligent Solution
Working with a third-party like SpendHQ would kill two birds with one stone. With practitioner-based visualization as part of the tool, your organization could leverage the best data management practices in place. Furthermore, data would be coming from SpendHQ that is already properly normalized and categorized.
On top of SpendHQ’s out of the box dashboards and reports, SpendHQ’s analytics sandbox provides advanced users the flexibility to configure custom dashboards and reports. In fewer than five weeks, organizations using SpendHQ can go from data chaos to clarity. The approach requires no time from clients’ IT departments, it avoids complex integration, and it enables the organization to focus on high value activities instead of constant data frustrations. Spend Intelligence is a “one-stop-shop” solution that takes you from simple spend visibility to actually leveraging it for strategic impact.