Spend analysis has become one of the most powerful tools available to businesses in 2019. Understanding what your company spends money on through spend analysis to assist with future procurement decisions increases saving opportunities, reduces maverick spending and even helps with supplier management.
By conducting a regular spend analysis on your business you empower your procurement team to make informed, tactical decisions during your unique procurement process. The more your company understands your spending, the better your team will be able to drive efficiency and streamline future procurement decisions.
Spend analysis is the process of collecting, and reviewing procurement spend information to lower cost, maximize efficiency, and strengthen stakeholder relationships. By taking advantage of procurement spending analytics, you allow your business the opportunity to collect, clarify, and most importantly analyze spend data. You can do this by using devoted software.
Cleanse Business Expenditure Through Spend Analysis
Step one of a spend analysis begins by simplifying your business spending. To create change within your business by streamlining procurement decisions, you need to know and understand where your money is going.
ProcurePort finds the most effective way to understand where your budgets are going is through sorting business expenditures into groups:
When you sort out your business expenditures into these subgroups, it allows you to set a clear pathway from your purchase orders to your suppliers. Compare real numbers and analytics so you can see where you are going wrong. From over-sized product streams to dismal distribution; everything becomes apparent when you can see and compare the information.
Robust spend analysis software generates trend predictions and simple graphs that give you an image understanding of your spending patterns. Using spend management software means that this information is available around the clock and reflects real-time. Real-time information allows procurement teams to monitor an interactive dashboard of cash-flow for your business continually.
This eliminates counting on buyers to self regulate and means you don’t have to wait on a quarterly report to get an overview on spend – all of which streamlines your future procurement decisions. When all this information is available to your company at all times, it allows everyone to be on the same page and makes your budget clear.
Supercharge Supplier Relationships With Spend Analysis
A strong supplier relationship reaps benefits for your company. Equally, a weak relationship will have negative effects on your business. Procurement spend analysis software generates reports based on vendor. These reports can highlight various areas of cost carelessness and help you to determine if supplier relationships are worth continuing.
Regardless of if you are beginning a new relationship or renewing an existing one- arriving with in-depth data reports on upfront costs, alternative options, market conditions, and future expectations impresses even the most unwelcoming clients.
Presenting this much information, up-front allows both parties to feel satisfied and have fair expectations for the future. The stronger a supplier relationship is, the more efficient each interaction will become, allowing you to streamline future procurement decisions.
Minimize Overall Procurement Costs Through Spend Analysis
Minimizing overall procurement costs begins by addressing internal and external activity. Not only does spend analysis software allow you to see where your company money is going, but it also provides you with a data cleanse that makes it easy to understand where the money is going. Addressing internal and external activity can be done through allocating spending by the purchaser.
This allows procurement managers to locate inefficient business relationships and cancel them if necessary accurately. Procurement spend analysis software makes it simple to pinpoint areas for implementing audit controls.
Drive Business By Making Big Data-Informed Procurement Decisions
“Big data” is what occurs when your software or computer system autonomously collects information, sorts, and analyzes the information using business intelligence software. Spending data on a large scale provides recommendations for future procurement decisions. Big data offers fact-based suggestions drawn from trends specific to your business, and it’s expenditure.
Software like ProcurePort automatically does all of the large data retention and collaboration to produce accurate results. By continually sending activity records to the relevant storage centers. This means your entire procurement team has access to assess all big data analytics associated with your business. Which results in you being able to accurately see where you stand within your industry, streamlining the procurement process. Without Spend analysis software, you have no records of ‘big data,’ which can negatively impact your decisions.
Efficiency should be the number one priority for any successful procurement business. Every teams’ bottom line is managing spend. It’s now easier than ever before to implement technology into your company to analyze your spending patterns to streamline future procurement decisions. To find out how you can streamline your future procurement decisions, further check out ProcurePort here.