Spend Analysis solutions are a critical component of the overall success of a spend analysis program and are being used by roles as wide as chief procurement office (or Head of purchasing) to category managers to buyers to chief financial officers. The whole solution often revolves about first increasing the spend visibility and then looking and analyzing the data. The modern spend analysis program consists of various process all of which contribute to an overall increase in spend visibility. These processes mainly include extraction of spend data from multiple internal systems be it the ERP or financial system, cleansing, transformation and classification of spend data followed by analysis or reporting of above data. The last phase of the program which is analysis or reporting of the spend data brings the most value in companies eyes. This capability helps the procurement executives slice and dice the corporate spend data in different ways like item category, supplier, date, geography, business unit etc. to effectively gain intelligence over purchased items. This information, then can be translated into true intelligence which can arm the strategic sourcing team while negotiating newer contracts with key suppliers.
All above can not be achieved without the help of a technology solution that facilitates your spend analysis program and since we want this investment to provide us maximum ROI. Clarity about the criteria of its selection is something which is high on radar of a procurement executive. The main prevalent criteria recommended by procurement technology solution experts around the globe are:
- Ease of integration between spend analysis solution with the sourcing program/solution
- Reporting and analytical capability of the technology solution
- Ease of integration between spend analysis solution with procurement execution function
- Level of automation and completeness of the solution in terms of features availability
- Ability to track or measure compliance of processes/data
Other than the integration criteria, the other main criteria as evident from above, is the process automation within the solution and including end to end process flow including areas like expense management, account payable or for that matter invoice processing reducing the usage of paper in office bringing in greenery as well as reducing costs.
In addition of the above criteria, another important one which is gaining ground these days is the ability to capture the collaborative action trail between a customer and supplier so that deflation can be driven using that data.
So, looking at the above points, what do you think is your criteria for selection of spend analysis technology solution. Is it different from the above or is part of them? Share your views for everyone benefit.