Spend Analysis – Visibility into Company Spending
Better Visibility into Company Spending
Businesses spend billions of dollars to figure out where they can save time or money. Companies will change store layouts, redesign their systems and even change the shade of ink on packaging to reduce costs. Even saving a fraction of a penny on packaging can make huge differences if the volume is high enough. It goes the same with making processes even slightly more efficient. There is a reason why Target and McDonald’s set aside budget to make improvements to their operations.
Procurement within an organization has access and regular contact with a wealth of data that can and should be tracked, analyzed, and used to make processes more efficient. Your company will make purchases and spend money but there is a strong likelihood that visibility into company spending is limited.
Many companies will use a paper based system or rely on a process that someone built out of an excel spreadsheet to try and organize the purchasing process. While the duct tape approach will work as an ad hoc solution most procurement leaders know that having more control over company spending will allow for greater visibility into purchasing. Insights into the purchasing process can maximize real bottom line savings.
Google analytics tracks website traffic, segments top referrals, and even displays what cities your viewers are visiting from. Having insight into these analytics allows your company to tailor marketing and inbound efforts to better suit your visitors. Procurement is standing on a different mountain of valuable insights driven by customers, suppliers and company spending. Leveraging the data by tracking and gaining better access to spend visibility will allow companies to plan ahead and respond quickly to changes in the supply chain.
Properly leveraging insight into company purchasing will allow your company to increase profitability. Reducing the cost of procurement is necessitated by placing the right people to advocate for change, having access to proper metrics, and encouraging the reporting of performance successes as well as failures to better understand procedures that should become standardized. The basic core functions of procurement are generally understood among those in the procurement industry but standardizing traditional procurement will free up time and resources to innovate.
One of the most difficult problems facing procurement is getting company leaders and executives to understand the importance procurement can play to a company’s profit line. Being able to deliver value while advocating for procurement modernization within an organization will take time and education, but those that choose to embrace change will benefit from innovation. If you want to become irreplaceable to your company you will have to be different. Push for modernization. Innovate and embrace technology. It will take some implementation but in the end, you will save your company money and bring about capable solutions.