Procurement urged to apply 'spend intelligence'

8 August 2006
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09 August 2006 | Paul Snell

Purchasers must develop "spend intelligence" if they are to be considered more than just "order takers", according to a report from Aberdeen Group.

The Spend Intelligence Benchmark Report, available from 9 0 /edit/images/new_window_icon.gif 14 12 Opens a new window 0 false false false false%>]]> said automated systems that can collect raw data and analyse it are "the lynchpin of a successful spend intelligence programme".

Spend intelligence is where purchasers use this information to identify possible savings, ensure contract compliance and develop strategic sourcing plans.

The report said by leaving the "dirty work" of classifying data to technology, procurement is able to focus on more strategic operations.

Almost three quarters (73 per cent) of purchasers interviewed said identifying and forecasting savings and negotiating contracts were the main reasons for using spend intelligence systems.

But adoption is at an early stage, with 53 per cent currently doing the work in-house using spreadsheets. Just 9 per cent of the 139 respondents had fully automated processes.


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