Supply Chain World - Fall 2017 - 16

PROCUREMENT

Many companies lack enterprise-level spend visibility
because they struggle to manage
strategic initiatives.

While these solutions have been around
for decades, many companies that own
them still struggle achieving enterprise-level spend visibility. Much of
their time is spent manipulating the data
on their own or managing the tool itself,
rather than managing strategic initiatives.
Which begs the obvious question.
In a world where several spend analysis solutions claim to provide enterprise-level spend visibility, why are
these tools failing to achieve complete
visibility for organizations?

Breaking Point

BY DAVID BUSH

Spend
Analysis
At a high level, spend analysis is
the process of aggregating, classifying and leveraging spend data to
gain visibility into cost reduction,
performance improvement, compliance and other value generation opportunities. It is part of an
overall spend management and
visibility process that includes the
analysis, award and monitoring
of direct and indirect corporate
spend. Additionally, it is the first
and last step of the strategic sourcing process that both identifies the
opportunity and measures the organization's achievement thereof.
16

Shocking as it may be, most founders of
traditional procurement and spend analysis software firms were not previously
procurement leaders themselves. These
tools weren't fully designed for procurement categorization and the data that
runs through ends up never being as accurate as it could be. As such, these huge
investments in technology solutions
do not appear to be paying off for many
organizations, and can often break down.
So how can this be avoided? While it
may not be the most glamorous solution, the simple fact is, companies must
take their data outside of native systems
and do the "pick and shovel work" to
clean it up first. Best of breed spend
analysis solution companies should be
able to aid in this process, helping to
normalize the vendors to eliminate duplicates and to consolidate to a standard
naming convention for the purposes
of spend analysis. To learn more about
what these common breaking points
and strategies for how to correct course,
download our white paper at www.
spendhq.com/procurement-whitepapers/baaad-data-whitepaper.
All this may leave you thinking, would
I be better off having my procurement
team build a custom solution?

Home-Grown vs. Spend Analysis
Home-grown systems are not spend

analysis solutions either. If an organization already has a powerful data
warehouse solution and an IT department, it might decide that it can build
its own spend analysis solution by
acquiring a powerful data visualization
solution and implementing it on top
of its data warehouse solution. While
this was the typical solution offered by
many vendors in the early 2000s, this
approach is not true spend analysis
because it has limited flexibility.
The intentions will be good and the
effort substantial, but at the end of the
day, the home-grown solution, will
typically be held together with the IT
equivalent of duct tape. In addition,
because the internal team will not be
experts in the construction of analytics
solutions, the solution will be relatively inflexible and limited to canned
reports, reducing its value.
Selecting a spend analysis solution
should be the first step any procurement
leader should take when evaluating the
procurement technology stack. Spend
analytics, and the resulting spend
visibility, are base-level requirements
for any procurement organization. No
procurement organization can make a
claim for world class if they do not have
good quality spend data available at a
moment's notice.
Selecting the right spend analysis
technology has never been more important to a business. Utilize the criteria
and recommendations in SpendHQ's
research report, "Spend Analysis: The
Foundation for Procurement Excellence," to help determine which solutions are best fit for your organization.
David Bush is the chief revenue officer of SpendHQ.

Bush has more than 17 years of technology experience
in the sourcing and procurement SaaS industry and
is consistently recognized as a leader in procurement
technology and high growth SaaS companies. Prior to
SpendHQ, David served as the chief revenue officer for
Determine (formally Iasta), an enterprise source-to-pay
suite solution where he successfully led the growth
transformation and turn around.

Supply Chain World FALL 2017

_SPENDHQ.indd 16

9/8/17 2:10 PM


http://www.spendhq.com/procurement-whitepapers/ardent-partners-spend-analysis-research/ http://www.spendhq.com/procurement-whitepapers/ardent-partners-spend-analysis-research/ http://www.spendhq.com/procurement-whitepapers/ardent-partners-spend-analysis-research/ http://www.spendhq.com/procurement-whitepapers/baaad-data-whitepaper/ http://www.spendhq.com/procurement-whitepapers/baaad-data-whitepaper/ http://www.spendhq.com/procurement-whitepapers/baaad-data-whitepaper/ http://www.spendhq.com/

Table of Contents for the Digital Edition of Supply Chain World - Fall 2017

Contents
Supply Chain World - Fall 2017 - Cover1
Supply Chain World - Fall 2017 - Cover2
Supply Chain World - Fall 2017 - 1
Supply Chain World - Fall 2017 - Contents
Supply Chain World - Fall 2017 - 3
Supply Chain World - Fall 2017 - 4
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Supply Chain World - Fall 2017 - Cover3
Supply Chain World - Fall 2017 - Cover4
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