This whitepaper assumes that the reader is already familiar with the basics of spend analysis. It is designed to help the reader understand the quantifiable benefits of spend analysis and to help anyone trying to build a business case for implementing a spend analysis solution. The benchmarks and metrics that the whitepaper cites are quite interesting, for example:
- Spend under management improved to 62% from 46% for organizations that implemented spend analysis solutions and that "by improving spend under management, enterprises are able to...ultimately deliver an incremental increase in cost savings."
- The average savings from strategic sourcing efforts credited to spend analysis initiatives nearly doubled.
- "Spend analysis reporting can be leveraged by procurement professionals to identify purchases made with suppliers not contracted, leading to corrective action and subsequent modification of behavior...The average incremental increase in contract compliance was 34% (or from 44% to 59%)."
In general, the whitepaper does a great job of not so much saying that spend analysis is a silver bullet for success, but by demonstrating why it is an important component of a procurement performance improvement strategy.
You can obtain your own copy of this whitepaper via Iasta's Web site.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
http://www.NextLevelPurchasing.com
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2 comments:
Charles,
While I applaud your continued and, in the vendor world, almost unparalled service to the supply and spend management community in your constant effort to keep them informed of best practices and killer technologies, like spend analysis, I must take exception with this particular recommendation.
Aberdeen DOES NOT understand what spend analysis really is, and this paper is, subsequently, not a good introduction to the subject.
For a great analysis of why, please see Eric Strovink's Sourcing Innovation guest post on why Aberdeen is literally "Lost in the Trees":
http://blog.sourcinginnovation.com/2007/09/13/aberdeen-on-spend-analysis-lost-in-the-trees.aspx
If your audience truly wants to understand the power of spend analysis, and a true data analysis tool in general, I'd recommend they start with the e-Sourcing Wiki-Paper (which is also sponsored by Iasta):
http://www.esourcingwiki.com/index.php/Spend_Analysis_and_Opportunity_Assessment
or Eric's great guest-series on SI:
I: The Value Curve
http://blog.sourcinginnovation.com/2007/01/23/spend-analysis-i-the-value-curve.aspx
II: The Psychology of Analysis
http://blog.sourcinginnovation.com/2007/01/26/spend-analysis-ii--the-psychology-of-analysis.aspx
III: Common Sense Cleansing
http://blog.sourcinginnovation.com/2007/01/29/spend-analysis-iii-common-sense-cleansing.aspx
IV: Defining Analysis
http://blog.sourcinginnovation.com/2007/02/01/spend-analysis-iv--defining-analysis.aspx
V: New Horizons, Part I
http://blog.sourcinginnovation.com/2007/02/05/spend-analysis-v--new-horizons-part-1.aspx
VI: New Horizons, Part II
http://blog.sourcinginnovation.com/2007/02/06/spend-analysis-vi--new-horizons-part-2.aspx
the doctor
Michael,
Thank you for your feedback. By reviewing this whitepaper, I am by no means saying that it talks about the finer points of spend analysis.
I specifically said that "This whitepaper assumes that the reader is already familiar with the basics of spend analysis" (i.e., this does not teach you about spend analysis and how it works) and went on to say that the whitepaper "is designed to help the reader understand the quantifiable benefits of spend analysis and to help anyone trying to build a business case for implementing a spend analysis solution."
If you want to learn what spend analysis is and how it works, this isn't the whitepaper for you. However, if you want researched benchmarks on the measurable contribution that spend analysis has made to procurement performance improvement strategies, then I definitely think it has great value. I speak with a lot of practitioners on a daily basis who struggle with convincing their management to invest in spend analysis and any ROI-related data can only help.
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