Claritum have helped many organisations analyse what they currently spend and identify savings opportunities. We know it can be a daunting task. However, a spend analysis can lead to significant savings opportunities. Below we have summarised how to carry out a Spend Analysis in 5 steps.
Step 1 - Capture Data
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.
Step 2 - Categorise
Once you have collected the spend data from throughout the business you can begin the analysis. Categorise the data into meaningful groups (for example: marketing, office supplies and software) to identify how and where the business is spending its money.
Target a spend category to focus your attention on.
Analyse your target category in detail. For example, for category print, one company found that hidden delivery costs included in the print costs represented a significant savings opportunity.
Step 3 - Standardise
Next, identify opportunities to standardize the spend.
For example - When the same items are bought by different buyers in different quantities, buying is erratic and this presents an opportunity to make savings.
For the category of print, we could standardise 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.
Step 4 - contract
Implement tools, like a cloud based spend management platform, to ensure that standardised best practices can be adhered to.
This will enable you to benchmark client performance against market opportunity.
Step 5 - source
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.
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 70 countries to deliver significant savings and efficiencies.
Find out more about Spend Analysis - read our white paper Spend Analysis for Complex Categories
If you'd like to find out more about what Claritum can do for you, then take a look at some of our case studies and see how we have helped other organisations manage their spend.