While the need for spend analysis in procurement is irrefutable, organizations continue to rely on outdated and ineffective methods in their sourcing and procurement life cycle. Spreadsheets can help you track your spend but if you’re still conducting spend analysis using Excel, you’re working harder than you need to be. You’re also most likely missing crucial data intelligence that will improve efficiency and reduce costs.
Why Excel isn’t a fit for spend analysis
A good number of businesses started out using Excel for their accounting including spend analysis. This may have worked when you started out but over time, it may not give you the information you need to make strategic sourcing decisions. Using Excel to track spend no longer works in today’s technology-driven digital business world. It has a number of shortcomings including;
- Tracking documents such as purchase orders with Excel is a manual process that is prone to errors. For instance, it is possible to bill a client twice by mistake or to forget to follow up with clients whose invoices are past due because of errors.
- Excel is not intuitive. You need some programming expertise if you are to use it for financial reports. You need to understand filters, macros, formulas, tables, and charts to produce reports.
- Another problem with Excel records is that the spreadsheets are separate. You can’t automate, sync and integrate data feeds so that invoices, purchase orders and other documents related to procurement and sourcing are generated on demand.
- Excel does not help you see the big picture. You cannot see mistakes or red flags and neither can you use the data to get projections and reports that you can use for budgeting and planning.
- Excel is static, unable to give you the dynamic functionality you get with spend analysis software. It doesn’t even come close to providing the advantages of software such as cloud backup, data feeds and synchronization with other apps. Technology is ever-evolving so these features are always getting better and better.
- Excel does not provide the security you need. In today’s world where cyber attacks are constant and serious, every organization needs to take strong measures to protect their data.
- Excel also sells you short when it comes to issues of control and access. However, when you use cloud-based software, you can access your records from anywhere such as your tablet or even smartphone. You can also choose and control the access you give to those in the finance and procurement departments while keeping records such as profit and loss private.
The importance of spend analysis
A number of factors have alerted organizations to the importance of spend analysis. These include the need for:
- Identifying and forecasting savings opportunities
- Identifying and prioritizing top spend categories
- Improving an organization’s negotiating power with suppliers
- Tracking off-contract spend
- Bolstering the bottom line
- Rationalizing and reducing the supply base
Challenges organizations face in carrying out spend analysis
When they do realize why carrying out this analysis is important, many organizations find that they have to overcome the following hurdles in order to do it right;
- A lack of systems in place for automating the analysis
- Different or incompatible sources of data such as the purchasing and finance departments
- Low-quality data
- Lack of the skills needed to conduct analysis
- Resistance from those concerned to change to a new system
- Unavailability of funds to get the software installed
The ProcurePort Spend Analysis software has solutions for all these challenges. First of all, it is very affordable. Secondly, it is intuitive and easy to learn, which reduces the resistance to change. The software is comprehensive and compatible with other software you may use for accounting and finance. You get a solution that can be configured to give you in-depth spend visibility. You also get advanced, global capability and insights that are domain-specific.
If you are still using Excel to track spend or if you’re not satisfied with the software you are using for e-sourcing and procurement, you will be delighted with ProcurePort’s Spend Analysis software. With this software, you can leverage technology and translate data into sourcing intelligence.
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ProcurePort is the global firm you can count on for e-sourcing solutions and procurement. Those who have trusted ProcurePort have seen results they never thought they could achieve. They have seen their operations turn around with new opportunities, improved quality of suppliers and more cost-effective sources.
Request your demo today and contact ProcurePort for your organization’s customized Spend Analysis solution.