Spend analysis is a practice of collecting procurement spend data information from all purchasing history, sources and systems, data cleansing, grouping, categorising, and analysing the organisation’s spend data to reduce costs, increase efficiency, understanding spending trends and improve supplier relationships. The spend analytics is essential in altamofen helping your organisation to identify and manage potential risks and at the same time optimizing the organisation’s buying power.
Strategic sourcing or procurement is usually in charge of producing a spend analysis of the organisation through dedicated software. This analytics is not only useful for the procurement department to identify savings opportunities but also for the management and finance team. With over 1800 companies, these are typical challenges procurement managers face that our analytics try to answer:
- HOW MUCH is my organisation spending on?
- WHAT is my organisation spending on?
- WHO is my organisation spending with?
- WHERE is my organisation spending it?
- Are there savings opportunities?
The process of reviewing collected data does not just focus on which items were sourced and purchased but also which suppliers that the organisation mostly purchase from, branches that they source and purchase from and price appropriation of the purchased items.
Types of Different Analysis Available on ADAM
- Overview analysis
As the name suggests, it provides a report of your organisation’s overall spending habits. This is a powerful tool of graphic representation for the comparative spend across several elements in the data such as goods, suppliers and many more. The data can be exported by users into .csv file and run it on excel to adapt to your own reporting format or to conduct your own analysis. This feature can be applied to the other types of data analysis on ADAM.
- Category Spend Analysis
To understand the analysis, you must first understand the range and breadth of categories of your spending and determine whether your organisation is sourcing for the same services and items from too many different suppliers or not. The analysis is built on hierarchies which means the spend transactions are categorised into the most appropriate category that is utilised. This type of reporting allows your organisation to single out any source of leakage in the supply chain.
With the help of the ADAM, you are able to identify the highest spending categories to provide your organisation with better negotiation power to ensure more fitting pricing and agreement in the future.
- Consumption Analysis
Consumption Analysis or commonly known as Tail-End Spend Analysis is seldomly managed in the procurement department. This is because the purchases are often too small, and don’t happen often enough hence it is not actively controlled. Besides, tracking their data can be challenging due to the lack of data visibility.
Doing an in-depth analysis with ADAM, procurement managers don’t have to worry about missing any data in the analysis as ADAM will help you track maverick spending and any non-compliant transactions. This will encourage more compliance with your spending trail and manage the tail spending in the future.
- Supplier Spend Report
A detailed supplier report can identify the amount of spending being made on the key supplier at an instant. By browsing historical consumption data, the analysis will provide details outlined to help procurement departments to acquire greater value from the key suppliers. This analysis will help in identifying any chance to consolidate relationships with suppliers and strengthen compliance.
Experience multiple data visualisation through ADAM by browsing on vendors, category, branch, department, etc. for a more detailed profile of your current key supplier spend.
- Supplier Purchase Report
Supplier purchase reports allow for every individual purchase and identify the consumption of each department and specific supplier utilisation. Companies working with ADAM are able to minimise annual spending cost with the help of:
- Vendor consolidation
- Supplier negotiation support
- Price comparison and variance analysis
By introducing analytics features on ADAM to our customers, we hope to enhance procurement proficiency that streamlines business operations. In the meantime, we are continuously improving ADAM to produce as a more powerful and insightful tool for a broader analysis of your spending. In the future, you will be able to experience product and service reports, predictive price reports and PR reporting modules on ADAM.
Procurement spends analysis is a crucial aspect of turning data into money. As a procurement manager, you may bear the responsibility to ensure that you continuously optimise your company spending. With ADAM, not only will you have an overview of the company spending but also the ability to maximise profitability by-making informed and make the best purchase decisions based on data for your company.
To make procurement as efficient as possible, increase the effectiveness of your procurement strategy by making spend analysis as part of the tool to enhance the company’s decision making and optimise return on your procurement spend with ADAM.