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Spend Analysis - its not only about identifying Savings

For last two months I was talking to some customers and prospective customers to study on "how" part of Spend Analytics system. This How is mainly about - How do you use spend analytics system - simple. My impression untill recently that everybody must be looking at reports like - Vendor wise spend, Commodity wise spend, Category wide spend etc etc, then identify what are important objects in terms of money - get the strategy defined to do negotiations and then actually saving money in longer term using negotiated pricing. Now after my brief 2 months study - this looks to be a small part of the world to me. Sometimes this is "Not" the part of results through spend analytics system.

Then what do industry do with it? Interestingly sometime people just needs a consolidated analytical system. Means, they have desperate systems all over the world, and data in those is not in good shape. So what they want is some system to consolidate, standardize the data, cleanse it and provide analytical system which gives them reporting through single instance. May be NO to potential savings, No to Negotiations and NO to price variance at large.

Now thats not a bad idea in my view. Many consulting companies tries to sell "Spend Analytics" solution by making big statements to customers about savings and all. But any salesman asked if customer needs that or just a "single truth of analytical data" reporting system is enough?

What do you think?

Prashant Mendki pmendki(at)gmail(dot)com

Comments

  1. thinkJune 24, 2010 at 6:02 AM

    Good Post Prashant.........

    Like you said if a spend analytics solutions is to consolidate data and provide report for visibility my doubt is to what extent the process of cleansing,enrichment and consolidation is automated or could be automated.If spend Analytics is an approach to visibility and if they sell their solution for that do they sell a automated solution to take care the consolidation and data quality part. I doubt (No actually) Its a different approch altogether with domain expertise and the spend analytics reports could be based on this....which is again a different arena where the solutions brings out the truth with reports. correct me please ???????

    .......Sushruth

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