You're looking to improve your procurement and sourcing work. What are the best spend analysis tools to use?

1 Data Extraction Tools

Spend analysis begins with data extraction from various sources, including invoices, purchase orders, receipts, contracts, catalogs, and ERP systems. Data extraction tools can automate the process and reduce manual errors, duplication, and inconsistency. Additionally, these tools can convert data from different formats into a standardized and structured format for analysis. When selecting a data extraction tool, you should consider its ability to handle large volumes of data and multiple sources, extract data from scanned or handwritten documents using OCR or AI, validate and verify the accuracy and completeness of the data, as well as export the data to your preferred destination.

2 Data Cleansing Tools

Once you have extracted the data, you need to cleanse it to ensure the quality and reliability of your analysis. Data cleansing tools can help you perform this task automatically, using various techniques, such as matching and merging records that refer to the same entity, standardizing and normalizing data values, enriching and augmenting data with additional information, and identifying and correcting data errors. These techniques can help you remove any errors, anomalies, outliers, or duplicates that can affect the accuracy of your analysis.

3 Data Classification Tools

After cleansing the data, you need to classify it into meaningful and relevant categories that can help you understand your spending patterns, suppliers, contracts, and savings opportunities. To do this, data classification tools can be utilized to assign each record to a predefined or custom category. This can be done with rule-based classification, which uses specific attributes such as supplier name or product description, machine learning-based classification which uses algorithms and models to learn from the data, or hybrid classification which combines both methods. By employing these methods you can achieve optimal results.

4 Data Visualization Tools

Once you have classified the data, you need to visualize it to gain insights and communicate your findings. Data visualization tools can help you create interactive charts, graphs, dashboards, and reports to identify trends, patterns, and outliers in your spending data. Additionally, you can use these tools to compare and benchmark your spending performance across different dimensions such as categories, suppliers, regions, or departments. Furthermore, these tools can be used to monitor and track your spending metrics such as spend under management, savings achieved, compliance rate, or maverick spend. Finally, they can be used to share and collaborate with your stakeholders such as managers, suppliers, or auditors.