Review: The ABCs of Spend Analysis Bring the data together

Let’s now look at the B section of Purchasing’s ABCs of Spend Analysis report.‘A’ section told us how important it is to have the skills to get to B, bringing it together.It is kinda like the monopoly game, you must pass A to get to B.

Charles Dominick with Next Level Purchasing has a great definition of Spend Analysis.“Spend Analysis is the systematic review of historical purchase data.The output of a spend analysis is a summary of purchases by various variables, such as category, supplier, and/or business units.”

In the ABCs article it states in implementing a spend analysis, the very first steps are getting support, deciding what data you need, then finding it.The process known as ETL – extract, transform, and load – pulling data together and cleaning it up.

High level support is a must on a spend analysis program.Without support you may run in to resistance from system administrators, financial staff or even other buyers. Due to cut backs in the last few years, overload of work on the remaining staff, employees lack the time to assist unless it is spelled out that they are to work on a program.It is not always because they do not want to help; it is a time and demand problem.Most supply management jobs require prioritizing duties.

Chris Haydon states in the article “you should start with the end in mind, map that territory and think of how the data needs to mesh together.Determine how often you want to pull the data.”

You need to know your purpose in order to determine your needs.