A spend analysis is a process for analysing the historical spend (purchasing) data of an organisation to provide answers to questions concerning spend visibility, compliance and control (Pandit and Marmanis, 2008).
The spend analysis aims to inform strategies that realise savings on total spend and better purchasing and supply management outcomes (Pandit and Marmanis, 2008). It is often the first step in aligning a firm’s sourcing strategy with its competitive strategy. In order to analyse all goods and services purchased and to forecast purchases for the future, firms need to aggregate total purchases across all organisational divisions (Rendon, 2005). The objective (output) of the spend analysis is to produce a fully documented understanding of the company’s prior and future spend for supplies and services, segregated by users and suppliers (Rendon, 2005).
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What separates EVA from other performance metrics ... is that it measures all of the costs of running a business-operating and financing (Stern Stewart and Co).
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Cost-to-serve methods are flexible and free from heavy prescriptions … [they] can be applied at varying levels of sophistication from simple spread sheets to...
No purchasing professional can afford to be unaware of the various cost accounting approaches (Lysons and Farrington, 2006)