Having a robust expense analytics solution is more complex than having an expense analysis because it involves having many sources of information from generally disparate systems, an intensive and complex task of data cleaning and classification process, as well as the selection of tools. suitable for processing.

The main problems with traditional spending analysis: it observes past behaviors and measures them with KPIs that are not aligned with the business . However, there are a series of benefits that pay off the effort exponentially.

The main objectives of its implementation are the identification of opportunities, savings management and expense control through access to intuitive visibility to relevant users with reliable and relevant data.

Applications of Advanced Spending Analytics

1.Data-oriented decision making

It allows you to generate transparency on global spending on all sources of information on suppliers, categories, business units, products, etc. Eliminates arbitrary decisions and reduces the possibilities of making decisions based on instinct and personal interests. It generates a reduction in time from the purchase order to the delivery of the good or service, detecting low costs, improving the efficiency of the supply chain and improving the supplier-customer relationship. Using data-driven decision making fosters the value of sustainable sourcing in the long term.

Key elements: quality, effectiveness and proper interpretation of data.

2.Rationalization of Suppliers

It generates a channel to a few suppliers, while the offer is identified and categorized according to the business need. This generates focus of efforts on those suppliers that offer the best value. Thus, renegotiation or conflict resolution activities with particular suppliers are prioritized, understanding their cost and effort.

Key elements: Rationalization of the supplier portfolio to optimize its performance.

3.Working Capital

Visible in real time payment opportunity, payment terms and precision in payment to suppliers, allowing to understand opportunities for better contractual negotiations. Similar suppliers may be identified with different payment terms or opportunities to improve working capital due to high contractual award amounts.

4.Internal benchmarking

Globally, it allows differentiation between heterogeneous business units, understanding how better prices are achieved and better suppliers are identified faster. By measuring performance separately, it is possible to understand the organization’s behaviors in detail, as well as identify immediate opportunities for cuts.

Key elements: You can set intra-company goals that are measurable and achievable.

5.Volatile categorization optimization

Compare purchases in categories with market indices, allowing you to generate certainty about whether the purchase was made at the right time and at the right price. Likewise, by incorporating prediction mechanisms, the buyer is enabled to make decisions that directly impact the return to the companies.

Key element: volatile categories that allow tracking against the market.

6. Compliance Monitoring

Deviations in contractual executions make it possible to generate early warnings and new negotiations and generate a progressive synergy of better contractual conditions for the next negotiation. Identifying suppliers who have an uncontracted expense reduces the risk of having uncontrolled prices.

Key element: Identification of irregular spending, to obtain lower prices

7. Combine spending data with savings tracking

Taking the step from identifying savings to materializing spending reduction requires speed. For this, it is necessary to ensure that the purchasing team carries out effective monitoring, which generates trust and credibility in the organization.

Key element: Monitor progress and ensure success in reducing spending.