{"id":10635,"date":"2019-09-30T21:14:57","date_gmt":"2019-09-30T19:14:57","guid":{"rendered":"https:\/\/sourcing-force.com\/?p=10635"},"modified":"2022-08-24T03:02:18","modified_gmt":"2022-08-24T01:02:18","slug":"spend-analysis-to-spend-management","status":"publish","type":"post","link":"https:\/\/sourcing-force.com\/en\/spend-analysis-to-spend-management\/","title":{"rendered":"Spend Analysis to Spend Management. Where are You on the Spend Meter?"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; fullwidth=&#8221;on&#8221; _builder_version=&#8221;4.16&#8243; use_background_color_gradient=&#8221;on&#8221; background_color_gradient_stops=&#8221;rgba(0,0,0,0.5) 0%|rgba(0,0,0,0.5) 100%&#8221; background_color_gradient_overlays_image=&#8221;on&#8221; background_color_gradient_start=&#8221;rgba(0,0,0,0.5)&#8221; background_color_gradient_end=&#8221;rgba(0,0,0,0.5)&#8221; background_image=&#8221;https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Spend-compressed.jpg&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_fullwidth_post_title date_format=&#8221;d\/m\/Y&#8221; featured_image=&#8221;off&#8221; text_color=&#8221;light&#8221; _builder_version=&#8221;4.16&#8243; text_orientation=&#8221;center&#8221; custom_padding=&#8221;100px||100px|&#8221; global_colors_info=&#8221;{}&#8221;][\/et_pb_fullwidth_post_title][\/et_pb_section][et_pb_section fb_built=&#8221;1&#8243; fullwidth=&#8221;on&#8221; _builder_version=&#8221;4.16&#8243; background_color=&#8221;f2f2f2&#8243; global_colors_info=&#8221;{}&#8221;][et_pb_fullwidth_menu menu_id=&#8221;16&#8243; submenu_direction=&#8221;downwards&#8221; fullwidth_menu=&#8221;off&#8221; _builder_version=&#8221;4.16&#8243; global_colors_info=&#8221;{}&#8221;][\/et_pb_fullwidth_menu][\/et_pb_section][et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.16&#8243; global_colors_info=&#8221;{}&#8221;][et_pb_row _builder_version=&#8221;4.16&#8243; background_size=&#8221;initial&#8221; background_position=&#8221;top_left&#8221; background_repeat=&#8221;repeat&#8221; max_width=&#8221;750px&#8221; use_custom_width=&#8221;on&#8221; custom_width_px=&#8221;750px&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.16&#8243; custom_padding=&#8221;|||&#8221; global_colors_info=&#8221;{}&#8221; custom_padding__hover=&#8221;|||&#8221;][et_pb_text _builder_version=&#8221;4.17.6&#8243; hover_enabled=&#8221;0&#8243; global_colors_info=&#8221;{}&#8221; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h2 class=\"p3\"><span class=\"s1\">There are different levels of <a href=\"https:\/\/sourcing-force.com\/en\/optimal-spend-analysis-how-to-leverage-multiple-data-classifications\/\">analyzing your spend<\/a>, ranging from basic spend analysis to advanced spend management.<\/span><\/h2>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-10646\" src=\"https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-2.56.06-PM-min-1024x316.png\" alt=\"state of the art spend management\" width=\"1024\" height=\"316\" srcset=\"https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-2.56.06-PM-min-980x302.png 980w, https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-2.56.06-PM-min-480x148.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">Consider the following scenarios:<\/span><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h3 class=\"p3\"><span class=\"s1\"><b>Company A:<\/b><\/span><\/h3>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">The procurement department reviews and analyzes their general ledger spend for 2019, compares prices, compares department spend totals against forecast, and finalizes the budget for 2020.<\/span><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h3 class=\"p3\"><span class=\"s1\"><b>Company B:<\/b><\/span><\/h3>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">The procurement department collects their spend data from pre-determined departments within the company and maintains that information in one central database. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is refreshed quarterly and the <a href=\"https:\/\/sourcing-force.com\/en\/procurement-a-comprehensive-definition\/\">procurement<\/a> executive reports on departmental spending.<\/span><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h3 class=\"p3\"><span class=\"s1\"><b>Company C:<\/b><\/span><\/h3>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">The procurement department collects all their <a href=\"https:\/\/sourcing-force.com\/en\/end-to-end-spend-data-management\/\">spend data<\/a>, from all their sources, in different formats, different languages and different currencies, and maintains that information in one central database. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><a href=\"https:\/\/sourcing-force.com\/en\/how-machine-learning-improves-data-cleansing\/\">Data is cleansed<\/a>, fixing errors in descriptions and transactions and duplicates are removed. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Suppliers are grouped under parent suppliers. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Transactions are categorized using <a href=\"https:\/\/sourcing-force.com\/en\/example-of-spend-data-classification\/\">UNSPSC<\/a>. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is refreshed quarterly and the procurement executive reports on departmental spending.<\/span><\/p>\n<p>By the way, I recently released a video on how to measure the accuracy of your Spend Analysis data. It might help:<\/p>\n<p><iframe title=\"Measure Accuracy in Spend Analysis\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/Fdmd-6nypOU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h3 class=\"p3\"><span class=\"s1\"><b>Company D:<\/b><\/span><\/h3>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">The procurement department collects all their spend data, from all their sources, in different formats, different languages and different currencies, and maintains that information in one central database. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is cleansed, fixing errors in descriptions and transactions and duplicates are removed. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Suppliers are grouped under parent suppliers. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Transactions are categorized using UNSPSC and assigned to a company-specific sourcing category. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is refreshed monthly and the procurement executive reports on departmental spending. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\"><a href=\"https:\/\/sourcing-force.com\/en\/turn-identified-savings-into-realized-savings-and-prevent-spend-leakage\/\">Maverick spend<\/a> is identified and a program is put in place to decrease maverick spend. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Contracts are reviewed and new terms are negotiated based on total spend. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Sourcing activities are conducted based on review of category spend.<\/span><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-10650\" src=\"https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-3.03.56-PM-min-1024x262.png\" alt=\"Spend Management State of the art sourcing force\" width=\"1024\" height=\"262\" style=\"display: block; margin-left: auto; margin-right: auto;\" srcset=\"https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-3.03.56-PM-min-980x250.png 980w, https:\/\/sourcing-force.com\/wp-content\/uploads\/2019\/09\/Screen-Shot-2019-09-30-at-3.03.56-PM-min-480x123.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/p>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h3 class=\"p3\"><span class=\"s1\"><b>Company E:<\/b><\/span><\/h3>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p class=\"p3\"><span class=\"s1\">The procurement department collects all their spend data, from all their sources, in different formats, different languages and different currencies, and maintains that information in one central database. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is cleansed, fixing errors in descriptions and transactions and duplicates are removed. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Suppliers are grouped under parent suppliers. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Transactions are categorized using UNSPSC and assigned to a company-specific <a href=\"https:\/\/sourcing-force.com\/en\/change-sourcing-categories-on-the-fly-to-benefit-your-spend-analysis\/\">sourcing category<\/a>. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">The number of suppliers per category is carefully monitored, with external data provided for each supplier. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Low-performing and\/or high risk suppliers are removed from the allowed list of suppliers. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Data is refreshed weekly and the procurement executive reports on departmental spending. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Maverick spend is identified and a program is put in place to decrease maverick spend. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Contracts are reviewed and new terms are negotiated based on total spend. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Purchases from each supplier are compared to contracts and terms with alerts created to monitor spend against contracts. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Sourcing activities are conducted based on review of category spend. <\/span><\/p>\n<p class=\"p3\"><span class=\"s1\">Year-end savings are allocated back to departments and are tied to executive bonuses.<\/span><\/p>\n<p>&nbsp;<\/p>\n<blockquote>\n<p>For a more detailed approach of a State-of-the-art Spend Analysis you should definitely watch our last webinar here:<\/p>\n<\/blockquote>\n<p>[\/et_pb_text][et_pb_video src=&#8221;https:\/\/www.youtube.com\/watch?v=ruPKQU6Ene4&#8243; _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;][\/et_pb_video][et_pb_text _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<p>Where does your spend analysis initiative fit in the previous scenarios?<\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_column _builder_version=&#8221;4.17.6&#8243; _module_preset=&#8221;default&#8221; type=&#8221;4_4&#8243;][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are different levels of analyzing your spend, ranging from basic spend analysis to advanced spend management.Consider the following scenarios:Company A:The procurement department reviews and analyzes their general ledger spend for 2019, compares prices, compares department spend totals against forecast, and finalizes the budget for 2020.Company B:The procurement department collects their spend data from pre-determined [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":10638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-10635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spend-analytics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Spend Analysis to Spend Management. Where are You on the Spend Meter? - Sourcing Force<\/title>\n<meta name=\"description\" content=\"There are different levels of analyzing your spend, ranging from basic spend analysis to advanced spend management. Consider these scneraios...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sourcing-force.com\/en\/spend-analysis-to-spend-management\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Spend Analysis to Spend Management. Where are You on the Spend Meter? - Sourcing Force\" \/>\n<meta property=\"og:description\" content=\"There are different levels of analyzing your spend, ranging from basic spend analysis to advanced spend management. 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