All of these advantages are maximized when spend analysis is used in conjunction with e-procurement. The Aberdeen Group estimates that companies can cut purchasing costs by 10 to 50 percent, and slash the costs of processing a purchase requisition from $107 to $25 or $30, by migrating to electronic purchasing.
Ready for Action
The effectiveness of a strategic sourcing program can rise or fall on the quality of the spend analysis. It contains the keys to the right suppliers, the right number of suppliers and the right allocation of spend. It provides the actionable data on which strategic sourcing decisions can be made. Without a comprehensive profile of enterprise spending, sourcing decisions may be sub-optimal or even wrong.
Automated spend analysis is certainly an avenue to pursue for any organization that is serious about strategic sourcing; the better the analysis, the greater the potential savings. For enterprises determined to leave no stone unturned to continually trim costs, that is good news indeed.
About the Author: Aatish Dedhia is CEO of Zycus Inc., a provider of artificial intelligence-based automated spend analysis and product content management solutions.