Spend analysis is the process of collecting, classifying and analysing all procurement data with the specific goals of controlling spend, ensuring compliance, and producing efficient processes. This is one of the key processes that procurement organisations use to proactively identify savings opportunities and manage risks.
Data from spend analysis can improve visibility into corporate spending, as well as drive performance improvement, contract compliance, and cost savings. Data insights also provide massive benefits for an organisation. This data includes an awareness of customer behaviours, cross-selling opportunities, sales trends, and KPIs to name a few.
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Whilst the focus within business intelligence strategies is often sales and sales-related activities, BI can be applied in a more wide-ranging manner. For example, BI tools can provide the visibility required for improving procurement processes.
Comprehensive spend analysis provides high-level insight into your procurement activity across all categories. Data included should span across your procurement system, contract database, and finance applications, resulting in a complete overview of spending.
Benefits of spend analysis with business intelligence
Conducting spend analysis undoubtedly achieves a return on investment. This is the case regardless of whether it’s a new business intelligence implementation or an extension of your current platform to include procurement data.
For example, understanding where your company spends money can produce efficiencies and deliver cost reductions by analysing product and service costs, inventory costs, contract spend, and sourcing cycle times.
Spend analysis with Sysynkt
Spend analysis is ultimately supported through comprehensive FMS solutions, such as Sysynkt. Sysynkt is an innovative cloud-based FMS solution, built from the beginning to maximise the potential of modern technology. Sold on an SaaS basis with unlimited user licences, Sysynkt removes the traditional financial barrier which prevents organisations from accessing a truly beneficial management system.
BDI is running a series of free webinars exploring the functions of Sysynkt in more detail. Whether you’re looking to learn more about how open banking can support your organisation, or you’re seeking greater management of expenses and purchasing, BDI has a webinar for you. Free tickets are available now on Eventbrite.
Steps to more efficient savings with spend analysis
In order to introduce efficient savings within your organisation, several steps can be taken. These include:
- Enhancing supplier performance and procurement operations.
- Recognising and minimising non-compliant, or maverick spending.
- Recognising the opportunity to negotiate superior contracts.
Above all, the data involved must be accurate. Gathering, cleaning, and re-classifying the data is crucial to data quality in order to provide valid results.
Summary
Introducing BI to spend management can improve the procurement process of an organisation. Following some basic steps to clean data and review existing expenditure can support a positive spend analysis which will improve your organisation’s operations.
Out-of-the-box tools, such as Sysynkt, provides an easy total view of spend. If you think a BI or FMS tool would benefit your organisation, or would simply like some more information, please contact one of our business experts. We would welcome the opportunity to help your organisation use data intelligently.
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