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    SSNS-Spring 20-Spend Analysis

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    Berjees Shaikh
    The document discusses strategic sourcing and spend analysis. It defines uncontrolled spend and outlines the characteristics. It then defines spend data management and outlines the key questions it can answer. The document describes the five steps of effective spend analysis: extract, validate, cleanse and classify, enhance, and analyze. It presents a data management framework and discusses why spend analysis is not always done. Finally, it identifies some sourcing opportunities such as supplier rationalization, demand aggregation, preferred suppliers, and contractual and payment term opportunities.

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    SSNS-Spring 20-Spend Analysis

    Uploaded by

    Berjees Shaikh
    39 views7 pages
    The document discusses strategic sourcing and spend analysis. It defines uncontrolled spend and outlines the characteristics. It then defines spend data management and outlines the key questions it can answer. The document describes the five steps of effective spend analysis: extract, validate, cleanse and classify, enhance, and analyze. It presents a data management framework and discusses why spend analysis is not always done. Finally, it identifies some sourcing opportunities such as supplier rationalization, demand aggregation, preferred suppliers, and contractual and payment term opportunities.

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    SSNS-Spring 20-Spend Analysis.pptx

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    The document discusses strategic sourcing and spend analysis. It defines uncontrolled spend and outlines the characteristics. It then defines spend data management and outlines the key questions it can answer. The document describes the five steps of effective spend analysis: extract, validate, cleanse and classify, enhance, and analyze. It presents a data management framework and discusses why spend analysis is not always done. Finally, it identifies some sourcing opportunities such as supplier rationalization, demand aggregation, preferred suppliers, and contractual and payment term opportunities.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    39 views7 pages

    SSNS-Spring 20-Spend Analysis

    Uploaded by

    Berjees Shaikh
    The document discusses strategic sourcing and spend analysis. It defines uncontrolled spend and outlines the characteristics. It then defines spend data management and outlines the key questions it can answer. The document describes the five steps of effective spend analysis: extract, validate, cleanse and classify, enhance, and analyze. It presents a data management framework and discusses why spend analysis is not always done. Finally, it identifies some sourcing opportunities such as supplier rationalization, demand aggregation, preferred suppliers, and contractual and payment term opportunities.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    Strategic Sourcing

    Spend Analysis
    Strategic Sourcing and Negotiation Skills by
    Uncontrolled Spend
    Uncontrolled Spend is characterized by:

    • Lots of Transactions
    • Purchasing not carried by buyers alone
    • Lots of Suppliers with low spend per annum
    • Lack of Formal Agreements
    • Lot of Suppliers per commodity
    • Lack of Standardized documents

    Strategic Sourcing and Negotiation Skills by Sheikh Irfan


    Spend Data Management Defined
    More simply, can you answer these questions?
    • Which suppliers provide the greatest value to the enterprise?
    • Which commodity and service areas represent the greatest sourcing opportunities for
    spend reduction?
    • What is my total spend by industry classification?
    • Where is spend occurring with non-preferred suppliers?

    Spend Data Management Defined


    Spend data management – also referred to as spending analysis -- is the process of
    aggregating, classifying, and using spend data for the purpose of reducing costs,
    improving operational performance, and ensuring compliance

    “How Can You Manage What You Don’t Measure?


    Strategic Sourcing and Negotiation Skills by Sheikh Irfan
    Spend Analysis-Steps
    Generally, there are five steps of effective spending analysis

    1. Extract — support automated extraction of all spend data from


    internal and external business systems.
    2. Validate — ensure spending data files are accurate and
    complete.
    3.Cleanse and classify — enable efficient, accurate, and preferably
    automated rationalization and classification of data elements and
    attributes.
    4. Enhance — enhance cleansed spending data with
    complementary business information, including existing
    contract terms, alternative parts references, suppliers’ financial
    status and performance .
    5. Analyze — Analyze gathered data with analytic tools.

    Strategic Sourcing and Negotiation Skills by Sheikh Irfan


    Spend Analysis-Data Management Framework

    Strategic Sourcing and Negotiation Skills by Sheikh Irfan


    Why Spend Analysis Not Done?

    • Lack of Awareness
    • Lack of capabilities
    • Not considered as core/Important activity
    • Malpractices/Political reasons

    Strategic Sourcing and Negotiation Skills by Sheikh Irfan


    Opportunity Identification
    • Supplier Rationalization: Different divisions buying from different suppliers, each
    offering a different price and terms.
    • Demand Aggregation: For negotiating lower prices with suppliers.
    • Preferred Suppliers: They can offer better rates and terms.
    • Contractual Term Opportunities: Late Delivery, Quantity violations may be charged.
    • Payment Terms Opportunity: Early payment can cause more financing charges.
    • Invoice Processing Opportunity: Consolidated payment, less administrative time,
    etc.

    Strategic Sourcing and Negotiation Skills by Sheikh Irfan

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