How do I analyse my spend?
Posted on 13th July 2018 at 13:41
Following on from our MiniBlog "Do you know what you are spending" we should look at how to work the data that has been collected.
Extracting information straight out of your financial system isn't always as easy as it sounds. Ensuring that you are able to work with "good" data may mean that you need to do a hefty amount of work up front to cleanse the information that has been dropped out.
However, by going through this "Cleanse" stage you are able to then group similar "types" of spend together. This could be by supplier to then apply an ABC categorisation to them, or by type of product purchased to then group similar purchased items into a category to allocate to a specific buyer, or by department providing an opportunity to set annual budgets.
Analysis of this categorised data will allow you to ensure that you are able to negotiate based upon your full spend potential or are able to negotiate discounts based upon resourcing of areas of spend. The number of suppliers could be reduced and you can instruct other areas of your business to purchase from preferred suppliers.
But this takes time and can detract from the day-to-day tactical work that you do.
Pro-Outsourcing can help you to complete this spend analysis, or it can provide you with a virtual resource to complete the day-to-day order placement and expediting to allow you the time to focus on developing the purchasing strategy based upon this spend analysis.
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