Historically, spend analysis has been used as a tactical tool to provide a quick insight into your top ten suppliers. Often the data available is incomplete and not truly representative of the whole procurement picture.
Today, spend analysis has a become a sophisticated technique which allows organisations and individuals to make informed decisions around cost savings opportunities, supply and demand management and risk mitigation by providing detailed transparency of third party expenditure. Furthermore, spend analysis is now seen as an integral component in the strategic sourcing process rather than an independent element which can provide intelligence on contractual compliance and line item price benchmarking.
If utilised correctly, spend analysis can be used at various touch-points in the procurement lifecycle, allowing organisations to review historic expenditure, monitor existing expenditure and forecast likely expenditure.