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Procurement organizations have a clear mandate: they must cut costs. Deloitte’s most recent Global CPO Survey makes this clear. It shows that cost-cutting is the number one objective for 78% of procurement leaders. At the same time, CEOs and CFOs are challenging procurement teams to reach out and partner with the business. They want them to break down silos, collaborate, and develop innovative ways to drive value across the enterprise.
It’s a brave new world. And teams need access to data and insights to meet their objectives. That’s where spend analysis comes in. The process helps CPOs understand the complete purchasing situation across their business.
To find out more about the importance of spend analysis we spoke with Spendency CEO, Nils Lundgren, and Chief Marketing Officer, Arvid Fredin. They highlighted the challenges preventing procurement teams performing effective spend analysis, how Spendency helps solve these issues and how Tradeshift is helping them go global.
Why is spend analysis so important for procurement?
Effective spend analysis gives procurement a detailed understanding of the spending across their business. It’s fundamental data; they must have it to know where they can drive value and to measure their success.
It’s what we call the procurement team’s roadmap: if you have one, you can proactively chart your path forward. And if you don't, you're lost with no real focus. It’s the difference between being proactive and reactive.
The problem is too few procurement teams are able to conduct detailed spend analysis at the moment. This leaves them unable to achieve their objectives and realize their full potential.
Why do so many procurement teams struggle to complete detailed spend analysis?
Many procurement teams struggle to access all the data they need, especially if their company operates multiple ERP instances and siloed systems. And if they can’t bring in all the data they’re left with an incomplete picture of spend.
The tools procurement teams use to conduct their analysis is another challenge. For example, many teams use Excel, which is cumbersome to use and challenging to update. It’s also difficult to slice and dice the data effectively in Excel, making it hard to get anything more than a broad overview of spend.
These issues make it difficult for procurement to know where it must focus its efforts to drive cost savings. They also make it challenging to have constructive conversations with business stakeholders around strategies to drive value.
How does Spendency solve these challenges?
We make it as easy as possible for procurement teams to conduct a detailed and complete spend analysis. Our tool pulls all the data from disparate sources and reformats the data, categorizing it according to the needs of the procurement team.
From this point, teams can cut and splice the data however they want. They can deep-dive into spend data and build dashboards. They can customize these dashboards for key stakeholders and use these to launch strategic projects. And they can set these dashboards to update in real-time to monitor the impact of their projects.
Why have you partnered with Tradeshift? Was there an a-ha moment?
We believe Tradeshift is at the cutting-edge of the industry and is paving the way for the future of business. And as a company at the front-line of procurement analytics, we want to be part of that. So we’ve integrated with Tradeshift to take advantage of all the spend data flowing through the network to enrich our solution.
Tradeshift is also a big part of our globalization strategy. Their network exposes us to businesses around the world, allowing us to step outside of our home markets and quickly take our solution global. It’s very exciting for us.
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