How do you ensure your spend analysis is an ongoing and continuous process rather than a one-time exercise?

By integrating spend analysis into our regular procurement reviews and utilizing automated tools for real-time data monitoring, we make it a continuous practice. This approach helps us stay agile and respond swiftly to any changes or trends.

Antes de come?ar uma análise de gastos, é crucial definir claramente seus objetivos e o escopo da análise. Seus objetivos devem estar alinhados com metas estratégicas, como redu??o de custos, otimiza??o de contratos, aumento da sustentabilidade ou melhoria no desempenho dos fornecedores. O escopo deve especificar as fontes de dados, categorias, períodos de tempo, e o nível de detalhe e granularidade dos dados de gastos. Ter objetivos e escopo bem definidos ajuda a direcionar seus esfor?os e a avaliar os resultados efetivamente.

Spend analysis is key part of procurement process that helps in identifying opportunities to improve compliance, automates the decision making process, tracks KPI's, leverages real time insights predicting behaviours, aids in assessing supplier performance

Effective goal setting is pivotal during spend analysis in procurement. Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals ensures a focused approach. Identify cost-saving targets, supplier performance metrics, and process efficiency improvements. Leverage spend analysis tools to gain insights into historical spending patterns, enabling informed goal-setting. Align procurement goals with overall business objectives, fostering strategic alignment. Regularly review and adjust goals based on evolving market dynamics and organizational priorities, ensuring a dynamic and responsive procurement strategy.

When in doubt, collect as much data from as many systems as possible. the task may seem overwhelming, but in the long run it will pay off to think bigger rather than more narrowly. Much like the concept of a 'data lake,' companies will benefit from centralizing and standardizing their data, even if they don't know what they will use the data for yet.

A qualidade dos dados é crucial para uma análise de gastos bem-sucedida. é fundamental garantir que os dados sejam precisos, completos, consistentes e confiáveis. Para isso, é necessário estabelecer uma estrutura de governan?a de dados que defina fun??es, responsabilidades, padr?es e processos para coletar, validar, enriquecer e manter os dados de gastos. Essa estrutura também ajuda a resolver problemas de dados, como duplicatas, erros, lacunas ou inconsistências, e garante que os dados sejam atualizados regularmente.

Constantly map commodities to a fit for purpose commodity tree. Aligning to this at the requisition level means data is updated into a structure ongoing rather than cleansed

Leveraging reporting tools like Qlik Sense and Power BI transforms spend analysis in procurement. Qlik Sense's associative data model enables deep exploration, revealing hidden patterns. Power BI, with its seamless integration with other Microsoft tools, ensures a user-friendly experience. Both tools facilitate real-time monitoring of spending trends, aiding proactive decision-making. Their interactive dashboards enhance stakeholder communication and collaboration. Integrating Qlik Sense or Power BI into spend analysis not only enhances efficiency but also empowers procurement teams to make data-driven decisions for cost optimization and strategic sourcing.

Spend analysis tools have come really far in terms of usability and the frequency of updates. In addition to easier, more frequent updates, a wide range of data enrichment options are available, covering everything from supplier diversity certification status and sustainability ratings, to terror watchlists and financial risk warnings.

Generative AI helps mapping & familying of data. It allows any size organisation to get value based insights. Its the time and specific skill that stops smaller companies benefiting

As Sammeli Sammalkorpi has said, data is one of the only resources that improves with use. The more people that use procurement-managed data for different business purposes, the better quality it will be. This is especially true at a detailed level, where budget owners and distributed buyers are able to spot data issues based on their management of spend and suppliers. Procurement should proactively solicit the business' input on spend categorization and enrichment information.

The ROI of spend analysis can be measured in the improved business decisions it makes possible. Turning data into results requires decision makers to trust and leverage the data. It must be easily accessible, integrated with other systems where possible, and kept as up to date as possible. All businesses have data quality challenges, so 'perfect should not be the enemy of good' when it comes to spend data, but it must be good enough for users to put it to work for them.

To ensure ongoing spend analysis: 1. Set clear objectives. 2. Schedule regular review cycles. 3. Automate data collection. 4. Standardize spend categories. 5. Implement continuous monitoring. 6. Engage stakeholders for insights. 7. Refine processes iteratively. 8. Benchmark against industry standards. 9. Train teams on tools and methods. 10. Secure executive sponsorship.

As companies become more mature in their approach to data management, procurement should keep in mind that at some point their systems may not be the official system of record or 'single source of truth.' It is more important for the company to have the right data management strategy than it is for procurement to own this data outright. Being collaborative and thinking big picture are preferable to a situation where procurement feels or looks territorial.

Understanding the limits of spend analysis in procurement is crucial for a nuanced approach. While it's a powerful tool for cost optimization, it may not capture qualitative factors such as supplier relationships or market dynamics. Historical data may not always predict future trends accurately, especially in rapidly changing industries. Additionally, the quality of input data directly influences the outcomes, making data accuracy a potential limitation. Striking a balance between data-driven insights and human expertise is essential, acknowledging that spend analysis is a complement to strategic decision-making, not a replacement.