- Spend analysis solutions should be flexible enough to collect data in any file format that your company supports.
- View all of your data in one central repository.
- Data should be immediately accessible.
There are numerous spend analysis solutions available today. Large enterprise resource planning (ERP) vendors, global consulting firms, supply chain management firms and spend analysis technology firms – all of these offer some flavor of spend analysis. Regardless of the solution, the following checklist provides the basic components that your spend analysis solution should provide, regardless of the specific vendor.
Your spend analysis solution should:
· Offer a Master Data Management (MDM) System that Supports Spend Data
The reporting and analysis of a particular solution may be slick and impressive, but unless the underlying data is collected, cleansed and classified within a robust data management system, the reports and subsequent analysis will be meaningless. Which is why you need a data management system that is specific to spend data’s unique characteristics – the data management system doesn’t just hold data, it collects data from numerous disparate sources. Which leads us to the next requirement for your spend analysis solution.
· Support Flexible Classification Formats and File Formats
Whether you use UNSPSC, a homegrown classification scheme or a combination of both, the spend analysis solution should be able to support any and all classification schemes. You are responsible for the data, and it should be in a format that you are comfortable with. Since spend analysis involves the collection of spend data from numerous sources, your spend analysis solution should be flexible enough to collect data in any file format that your company currently supports – as long as it’s provided in an editable data file format. You shouldn’t be forced to reformat your data files to match the vendor’s file requirements, unless you’re working with read-only pdf documents. Which leads us to the next requirement for your spend analysis solution.
· Provide an Automated, Repeatable Solution
If your solution provider is offering a truly automated solution, they should accept data files in any electronic file format. If you’re providing read-only pdf documents to your solution provider, then they are using a manual process to classify your data. There is no way around that. Offering to “electronically scrape” the data from your read-only documents is not an accurate or efficient process and doesn’t offer the ability for ongoing, automatic data refreshes. Which leads us to the next requirement for your spend analysis solution.
· Refresh Your Data Within One Day, on an Ongoing, Consistent Basis
You need to have the most relevant, up-to-date data possible to make decisions. In order to have updated data, your spend analysis solution should offer automatic, immediate refreshes on an ongoing, consistent basis. For a typical spend analysis implementation, automatic refreshes can take less than one day. If your solution provider can’t provide this ability, then their solution isn’t automated. Once the initial cleansing and classification has been finalized and approved, there is no reason why your data can’t be refreshed easily, unless the solution is a manual solution. Which leads us to the next requirement for your spend analysis solution.
· Be Available Anywhere, Anytime
You should have access and full visibility to your spend data at all times throughout the spend analysis process. Whether in the initial cleansing and classifying stage or the final reporting and analysis stage, you should be able to review and analyze your data throughout the process. You should be able to spot errors and discrepancies immediately, minimizing the risk of inaccurate results. Your spend data should be accessible whether you’re at home, at a conference or at a golf game. Success depends on making the right decisions, at the right time, no matter where you are. Cumbersome client-server applications are no longer acceptable in today’s increasingly mobile environment. Your spend analysis solution must be available as software-as-a-service, with little to no need for IT support. And last but not least, we provide the last requirement for your spend analysis solution.
· Collect More Than Just Spend Data
Improving the bottom line requires more than just analyzing your spend data. You need to be able to view all of your data in one central repository. This includes financial data, sales data, freight data and external data such as third-party supplier and market data. More and more spend analysis providers are offering third-party data to complement your existing data. You should be able to make decisions based on all the data available, not just a small portion of your internal spend data.
Joy McCaffrey is the Senior Product Marketing Manager at Spend Radar and is responsible for marketing and managing Spend Radar products and services. Joy has more than 15 years of technical product management and marketing experience with software, ecommerce and eprocurement products at both small and large companies.