How Modern Data Analytics Solutions Support Better Spend Clarity
Would you like to get value out of your company’s data, make better buying decisions, and pinpoint high-spend problem areas, and maybe even predict future cost structures? Modern Data analytics solutions can make it all possible.
These solutions have come a long way since the Excel-based setups that were at the forefront ten years ago. Back then, massive amounts of data were often stored in poor structures that made drawing meaningful conclusions challenging, if not impossible.
Today, using cutting-edge cloud solutions, procurement professionals can easily access, manage, and analyze even larger amounts of data that is automatically updated, completed, and presented in a clear way that supports real-world procurement decision-making. Trends, issues, and optimization opportunities can be identified more simply and accurately. In turn, the procurement team is able to interact more smoothly amongst themselves and with external stakeholders and add more overall value to the company as a whole.
This article is the first in a four-part series covering the specific ways these modern analytics solutions can improve the four key aspects of procurement controlling: spend, supplier performance, risk management, and efficiency.
So now, let’s take a look at spend.
Better clarity and visibility trought modern analytics solutions which help unify multi-source data
Thorough spend analysis is key to executing good procurement strategies related to category and supplier management, as well as tactical processes behind tendering, negotiations, and contract management. It helps procurement professionals assess cost-reduction opportunities, prioritize procurement optimization initiatives, monitor procurement efficiency, and boost overall business performance. It is also essential for good risk management, compliance, and building good relationships with suppliers.
As many global enterprise procurement executives have come to realize, effective spend analysis starts with properly structured and visualized spend data. Why?
Because their spend data often comes from a puzzle of data sources, spread out across their IT ecosystems. The more ERP systems and procurement platforms they use, the more difficult and complex it becomes to make sense of all the data these technologies create. Some of the data comes from automated processes, and some of it is entered manually. As a result, this data is frequently stored in multiple locations and can be inconsistent, incomplete, categorized according to different taxonomies, and even written in multiple languages. In addition to that, procurement teams need to integrate data coming from external sources, providers of information on financial condition of suppliers, sustainability or diversity.
Modern data analytics solutions
All this data must be detected, collected, cleansed, structured, classified, and analyzed before it can support good decision-making. Excel reports are simply not up to the challenge of unifying and completing it all.
This is where modern analytics solutions come in. They bring all the enterprise’s spend data together to give you a crystal-clear view of spend, and how to best manage your procurement categories. For example, instant spend cuts by vendor, subcategory, product or region can help you precisely define cost optimization levels, see new opportunities to crack down on tail spend and maverick purchases, and rationalize your supplier base.
You can also accurately assign responsibilities and workloads among category managers and take full advantage of internal benchmarking by comparing trading conditions across business units or regions. And that’s just for starters.
Stay tuned for our next article on how modern procurement analytics solutions help improve supplier performance.
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