Spend analysis is the process of analyzing various aspects of expenditure. It is the process of collecting, classifying, and cleansing expenditure data in order to improve efficiency and reduce various types of procurement cost. The three major entities in spend analysis are: commodity, vendor and cost. The main reason why spend analysis is important in corporate organizations is because it helps to maximize the overall profit. Spend analysis is a means to ensure that ROI, that is Return on Investment, is always within the expected limit.
Cloud Based Purchasing Software for Spend Analysis:
Following are a few advantages of using Cloud Based Software for Spend Analysis:
A cloud based purchasing software for spend analysis can turn out to be a crucial tool for Chief Procurement Officers or CPOs. It is an efficient tool for many global enterprises and multinational organizations to effectively keep track of all their spending, but is also affordable and just as essential for the small to medium sized business.
A cloud based purchasing software for spend analysis helps to achieve spend visibility which is highly useful for CFOs and CPOs. It helps CFOs and CPOs to keep track of important financial decisions like what the company is buying, from which vendor the company is buying, whether the purchasing is helping their actual cause of maximizing profit or not, etc with the help of generated reports. This software helps them to achieve the savings they were initially promised from a project by generating various reports.
A cloud based purchasing software for spend analysis gets its derivational and calculation capabilities from the spend cube. The spend cube is a three dimensional cube with supplier, category and business unit as its three dimensions. Price and Volume are calculated on the basis of dimensional information of the cube. Reports generated are also based on this information.
Purchasing process is able to achieve a greater level of transparency with the help of cloud based purchasing software for spend analysis. The software works on a hierarchy that is defined the by company. This rules out any kind of unnecessary purchases made. Spending is this way controlled at all levels in the organization.
The cloud based purchasing software for spend analysis is also able to ensure that the purchases that are made are from trusted vendors at appropriate price. This ensures that right products are being purchased at an optimum price.
Real Time Reports generated on-demand helps managers get insight into the market. The negotiation power of managers are improved because of these reports generated by the cloud based purchasing software for spend analysis. The on-demand reports generated have information like current spend, historical trend, and vendor performance.