The procurement department is responsible for making strategic decisions about purchasing. Total public purchase is around $9.5 trillion, which equals 13% of the total global GDP. Thus, CPOs around the world have a huge opportunity to gain a competitive edge by decreasing their purchasing costs. Organizations employ different methodology to decrease cost, one of them is Spend Analysis.
Spend Analysis is concerned with analysing expenditure data across an organization to find hidden opportunities to decrease costs.
It answers three vital questions for any organization
Contents of a spend data sheet can contain commodity description, price, volume purchased, supplier information, profit center, cost center. We could further modify spend data sheet as per our requirement. Once this data is present, it could be analysed through various angles to find new opportunities.
So could be analyzed from spend data? Let's find out:
With huge opportunities spend analysis present itself, we ought to find ways that can expedite it. Excel spreadsheets are effective but slow and are prone to human errors. With various software solution available like SAP Ariba, Zycus organizations could expedite the process and unlock opportunities to increase their profitability.
Abhishek is an experienced System Engineer with a demonstrated history of working in the information technology and services industry. His interest lies in learning about the operations involved in manufacturing as well as service industry and how IT could be utilised to streamline their processes. He is passionate about project management and have a rich experience of its application in service industry.