The greatest challenge when it comes to procurement is analyzing spend. No data point is more critical to procurement and your business’s bottom line. Unfortunately, for many organizations, analyzing spend is not automatic nor is it easy.
A report by the Aberdeen Group found that 60% of organizations rely on manual tools to collect and analyze spend data, which results in limited spend visibility and an inability to improve cost savings. By using a spend analysis tool, Aberdeen found that companies can achieve a 5 – 20% cost savings for each new dollar spent under management.
When dealing with spend, many organizations struggle to discern basic spend data points, including the number of their suppliers, as well as their spend per category. A lack of spend knowledge is particularly common in companies that use multiple procurement platforms (ERPs), have a global footprint and have significant levels of outsourcing. The more complicated your procurement process and the more wide-spread your data sources, the more difficult it is to analyze and understand your business’s spend.
The issue is that when you have a complicated process without a solution for monitoring and reviewing your spend, you end up with long delays—and even an inability—to capture savings opportunities or make profitable strategic decisions. Too many sourcing analysts are required to waste time to clean and analyze spend data to understand the situation. Then, it takes even more time after that to implement change.
To simplify procurement and overcome the spend analysis challenge, your company needs to implement a procurement system that does more than simply add charts and graphs to your data. You need a procurement tool that establishes a catalog to reign all data and procurement items into one place. This catalog and its corresponding data analysis goes in depth about your spend points, so it becomes an easy matter to manage your budget, prevent fraudulent activity and increase profits.
An all-in-one system, such as Vroozi’s Mobile Procurement platform, helps you not just pull information from many different types of internal and external sources, but to also standardize your data into a single location so you can quickly and easily spot spend overlaps, supply chain risks and ways to save money. A modern spend analysis tool and singular catalog platform should be able to integrate seamlessly with your existing ERP technologies, best-of-breed solutions and processes.
By using a procurement tool that helps you tackle the difficult process of analyzing your business’s spend, you can instantly provide your procurement leaders answers to vital questions that will enhance their roles. Solving the spend analytics issue in your organization would make your procurement process much simpler and deliver improvements far beyond the investment in technology required.