The eSourcing 2.0 campaign is thrilled to announce that with less than one week to go before election day, we have selected a perfect running mate: Spend Analysis, the people’s champion (Well, technically not a champion, it only made the elite eight during this year’s CPO Final Four but this is an election campaign so the “truth” is subjective).
As you surely know, spend analysis is the name of the process used to (a) collect the spend data from the different enterprise source systems, validate it, and then place it in a standardized and usable format (b) organize the information into a standard classification structure and cleanse the information by eliminating any mistakes, discrepancies, and/or flaws in the data set (c) enrich the spend data with complementary information that can provide greater context around the category, supplier, and usage within the enterprise and (d) analyze (i.e. “slice & dice”) the spend data to identify opportunities and support decisions.
Spend analysis is the perfect partner for an eSourcing 2.0 policy because a critical factor in the successful development of a sustainable sourcing program is having a clear understanding of what you are buying and from whom (i.e. spend visibility). Whether it is helping procurement organizations to identify and prioritize sourcing opportunities or monitor and manage compliance or enable business units to track spend against budgets and plan for the next cycle, spend analysis seeks to provide data in a usable format with context to help stakeholders make better, more-informed decisions. For spend data to drive real value, organizations must take action on it. This is particularly true when sourcing.
One reason why so many groups struggle with sourcing is that they lack visibility into spend. In an eSourcing 2.0 world, having spend visibility is like having a state-of-the-art lab that enables the sourcing science to be performed or like having that studio in SoHo that gives you plenty of space to create true sourcing art (and have cool parties).
Ardent Partners’ Research continues to show that visibility into enterprise spend is the foundation of procurement excellence. Chief Procurement Officers and other procurement leaders who attempt to manage their operations without visibility into their spend, processes, and supply base cannot claim to be leading a truly strategic function. In fact, the upcoming CPO Rising 2012: Keeping Score report will show that 90% of all Best-in-Class procurement departments have the ability to leverage spend data to identify sourcing opportunities.
So, we welcome Spend Analysis to the campaign
eSourcing 2.0 and Spend Analysis, a team that cannot be beat your source for a better world…
Source or Lose 2012!