Claritum have helped many organisations analyse what they currently spend and identify savings opportunities and we know it can be a daunting task. However, a spend analysis can lead to significant savings opportunities so below we have summarised how to carry out a Spend Analysis in 5 steps.
First you will need to capture your spend data, start by identifying the areas of your business that purchase items such as procurement, finance and marketing. Collect the data into a single source.
Once you have collected the spend data from throughout the business you can begin the analysis. Categorize the data into meaningful groups (for example: marketing, office supplies, software) to identify how and where the business is spending it’s money.
Target a spend category to focus your attention on.
Analyse your target category in detail. For example, in our choosen category, print, one company found that hidden delivery costs included in the print costs represented a significant savings opportunity.
Next, identify opportunities to standardize the spend.
For example – When the same items are bought by different buyers in different quantities, buying is eratic, this presents an opportunity to make savings.
In our target category of print, we could standardize common sizes and formats of the print purchased. This has the benefit of ensuring the branding remains consistent and also leads to opportunities to increase order volumes and negotiate better rates.
Implement tools, like a cloud based spend management platform, to ensure that standardized best practices can be adhered to.
This will enable you to benchmark client performance against market opportunity.
Use your cloud based spend management platform to ensure best practice is followed and future products are sourced more effectively.
Repeat the Spend Analysis in 5 steps across your organization for all your spend categories.
If you need more detailed information about Spend Analysis then be sure to download our white paper Spend Analysis for Complex Categories.
If you would like help conducting a spend analysis of your business then please get in touch with us today and we will be happy to help you.
Claritum’s cloud spend management platform enables businesses and service providers to gain spend visibility and control of every transaction. Our platform is trusted by over 150,000 users in 35 countries to deliver significant savings and efficiencies.