Analysis: Enterprise Level Spend Analysis

BP161 Enterprise level spend analysis

Spend analysis involved collection of data across procures to pay process in an enterprise and slicing and dicing these data into useful information. It is used for supplier negotiation future saving forecasting working capital and cash management activities. The various software available in the industry include: SAAS, ARIBA, SAP-SRM, Oracle-Supply chain. Enterprise Level Spend Analysis aims at enhancing visibility of the spends in an organization and provides high value input for operational and strategic decisions.

Aberdeen group, 2012 says that spend data management has emerged as one of the leading strategies enterprises will use to drive continuous improvements in supply management.

The following

Spend data management principles and solutions being applied to multiple business areas: The link between spend data management and sourcing and supplier management is obvious. However, accurate spend data is an equally critical to other business objectives, including compliance management, inventory management, budgeting and planning, and product development and management. Renewed focus in these areas is fueling additional interest in spend data management.

3. E-sourcing users view spend data management applications and services as key to next round of savings. Two recent Aberdeen studies of more than 325 supply management executives identified spend data cleansing and classification software and services are among the top priorities for investment.

4. Spend data management now a core component of platform and service provider offerings. Recognizing the critical importance accurate and complete spend data has on the value of their own solutions, several e-procurement and e-sourcing platform providers are boosting their spend data management capabilities by acquiring spend data cleansing and classification applications or developing or partnering for spend data management services – or both. Other business service providers, such as procurement service providers, financial services firms, and consultants, are making similar investments to bolster their spend data management capabilities and

Hire the right people. Employing a staff experienced in logistics management ensures that you can proficiently assess shipments to determine the most economical transportation mode. Your logistics team must be able to effortlessly evaluate a shipment and convert it to the most cost-effective—but expeditious—mode.

2. Determine why you need to expedite. Take a good look internally. Is the use of some expedited freight due to poor planning? If it is, work on improving the root cause of the problem rather than just focusing on its effects.

3. Reduce fulfillment time. Ask yourself: How quickly can your warehouse get a fresh order out the door? Can the process be improved? If you cut order-to-ship cycle time, you can reduce expedited freight costs.

4. Establish metrics. Start measuring to start managing more effectively. If you've already established some metrics, make sure they're the right ones. If they're not, make changes.

5. Share the metrics. Make sure senior management understands how much money is spent on expedited transportation as well as all the factors that go into it. Approach them with solutions. For example, "If we improve forecasting, we can cut transportation expenses in