Skip to main content

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. 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

    ReplyDelete

Post a Comment

Popular posts from this blog

Bristlecone Webinar on Supplier Risk Management

Purchasing Magazine, Bristlecone and SAP getting together to bring you very good discussion on supplier risk management. Webinar will be held on June 24, 2 to 3 PM eastern Time, USA. Contributors are - Paul Teague from Purchasing magazine , Jason Buch from spendmatters , Naresh Hingorani from Bristlecone - Supply chain leader company and Padmini Ranganathan from SAP. As we always talk about spend visibility, data issues, strategic sourcing - these distinguised speakers will bring out more strategic views to the table on how all this can be achieved to analyze your business risks better, upfront. You can register for event by accessing this link and register See you there.

Master Data Management – Product or Process ?

I have 2 SAP systems and I want to fix my material master, Services Master. I want all that data to be clean, standardized, classified, enriched and load it back to my SAP in next 6 months. What do you suggest ? Chris - one of my key client was explaining during a “solution understanding” call. My sales manager Tom, enthusiastically started talking about new version of the MDM platform by ERP company, tools, technologies, product landscape, licenses etc. After 30 minutes of sales pitch, I could see confusion on Chris’s face clearly. He said - but I don’t want to add any new product in my infrastructure for all this. Can you just implement MDM for me without I adding any new software ?   Both are using MDM implementation as a keyword, but in a completely different context. Chris wants to implement MDM as a process while Tom was trying to sell MDM as a new software. Whats the difference ? Lot I will say. MDM as a product – when you sell a   software license to a...

Data Management - Elephant & Seven Blind Men

I am sure most of you read a story of Elephant and Seven Blind Men. For starters - this is how the story goes - "A number of blind men came to an elephant. Somebody told them that it was an elephant. The blind men asked, ‘What is the elephant like?’ and they began to touch its body. One of them said: 'It is like a pillar.' This blind man had only touched its leg. Another man said, ‘The elephant is like a husking basket.’ This person had only touched its ears. Similarly, he who touched its trunk or its belly talked of it differently." As Wikipedia mentions - This story has been used to illustrate a range of truths and fallacies. At various times it has provided insight into the relativism, opaqueness or inexpressible nature of truth, the behavior of experts in fields where there is a deficit or inaccessibility of information, the need for communication, and respect for different perspectives. The moral of the story is - While one's subjective experience...