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Question: What Is Spend Analytics?

Spend analysis is the practice of analyzing procurement spend to decrease costs, increase efficiency or improve supplier relationships. Procurement spend analytics is the process to collect, cleanse, classify and analyze spend data through either dedicated software or one-off spend cubes.

What is the purpose of spend analysis?

Spend analysis is the process of identifying, gathering, cleansing, grouping, categorizing and analyzing your organization’s spend data. This is done with the goal of decreasing procurement costs and improving efficiencies by increasing visibility and transparency.

How do you do a spend analysis?

Spend Analysis Example—Seven Steps to Success

  1. Identify Your Objective. Spend analysis is not a one-size fits all affair.
  2. Identify Spend Data Sources.
  3. Collect and Consolidate Data.
  4. Clean Your Data.
  5. Link Suppliers and Categorize Spend.
  6. Perform Spend Analysis.
  7. Rinse, Reassess, and Repeat.

What are spend analytics tools?

Spend analytics tools are specifically designed to optimize the value of spend data – industry-leading spend analytics technology platforms like GEP SMARTTM deploy artificial Intelligence-based tools and algorithms to power through large volumes of spend data and apply appropriate taxonomies for accurate spend

What is a spend data?

Also known as categorisation to some people, spend data classification is when you categorise or classify your data into a bucket from a taxonomy or a category tree. And, what that does is it helps aggregate/combine your data into organised piles of information.

What is procurement spend analytics?

Spend analysis is the practice of analyzing procurement spend to decrease costs, increase efficiency or improve supplier relationships. Procurement spend analytics is the process to collect, cleanse, classify and analyze spend data through either dedicated software or one-off spend cubes.

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What are spend types in purchasing?

Making data-driven decisions around spend requires a clear understanding of spend categories, including direct, indirect, maverick, and tail spend.

What is a spend category?

Goods or services with similar characteristics that are grouped together for planning and management purposes. For instance, furniture could be a spend category for a business, and have sub categories consisting of the desks, chairs, tables and cabinets purchased by the company during the year.

What is spend influence?

Influenceable spend This is the level at which the spend figure becomes very open to manipulation and interpretation, and with good reason. “Influenceable spend” is the subset of non-payroll spend that the procurement team can actually influence and is always either equal to or less than non-payroll spend.

How can we use spend analysis in strategic sourcing?

Spend analysis is the process of reviewing current and historical spending. The goal of the exercise is to reduce cost, improve strategic sourcing, and increase the efficiency of spend management. An analysis requires spend data processed into KPIs and metrics and then visualized to show patterns.

What you mean by procurement?

Procurement is the act of obtaining goods or services, typically for business purposes. Procurement is most commonly associated with businesses because companies need to solicit services or purchase goods, usually on a relatively large scale.

What is external spend?

External spend typically represents 50-70% of revenues in the construction industry. It comes as no surprise that the industry in consequence ensures that it is focused on buying cheaper. That these savings are not currently being captured is due to the unique nature of the industry.

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What is a spend taxonomy?

Spend taxonomy is the classification of an organization’s spend in a hierarchical order that usually ranges from 3 to 5 levels depending on the complexity of their spend.

What is spend analysis Yono?

Knowing how and where all you spend helps one to keep the expense under control. With YONO, you get an overview of your expenditure through the ‘Intelligent spend analysis’ feature, which automatically tags and categories your transactions.

What is spend efficiency?

The efficiency ratio indicates the expenses as a percentage of revenue (expenses / revenue), with a few variations – it is essentially how much a corporation or individual spends to make a dollar; entities are supposed to attempt minimizing efficiency ratios (reducing expenses and increasing earnings).

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