Enterprise Performance Management - Data is First Priority

Accurate spend data is not available. Too many sources – data difficult to aggregate and classify. Supporting master data like contract, vendor is not available in electronic format. Master data is duplicated, dirty and incomplete. Spending analysis approach is too narrow. Spend data is historic , not forward looking. Analysis process is Adhoc. Data not broken down into cost, volume, drivers with baselines, targets, actual. Confusing technology and service market. Fragmented technology market services. Providers solve different problems and involved in diff phases of life cycle. Building hard ROI case is tricky.

Identify path to spend reduction. Leverage spend across locations. Develop category specific strategies for spend management. Identify and control areas of maverick spend. To accelerate ROI on strategic sourcing / procurement efforts.

What is Spend Analysis ? Spend analysis is an in-depth analysis of purchases, used to determine how much is spent, what it is spent on, from whom items are purchased, and who is doing the buying. The resulting analysis provides business intelligence that allows supply chain managers (SCMs) and sourcing teams to more effectively manage requirements by commodity group Why it is Important ? Company’s annual sales is $ 25,000,000 per year, corporate spend of 40% and the gross profit margin before taxes is 28%. Then If spend is reduced by 15% through better procurement intelligence Then $ 1,500.000 could be saved in cost and increasing the gross profit margin to 34% That equates to increasing revenue by $ 5,300,000 and all of the cost to support that growth .