Description
Spend analysis involves identifying all expenditure related to the ordering, delivery, receipt and payment of goods and services over a period of time.
The success of government’s supply chain management is largely dependent on the ability to access and interpret it’s spend data.
Spend Analysis enables the institution to consolidate historical spend in order to develop appropriate sourcing strategies.
Objective:
- Spend analysis is in essence a historic view to obtain a clear understanding of your organisation’s spend trends for this commodity in terms of Rand value,
- quantities, by who, with who and how often.
Output:
- A complete spend profile of the commodity
WHAT IS SPEND ANALYSIS?
Technically, spend analysis is the process of aggregating, classifying, and leveraging spend data for the purpose of gaining visibility into cost reduction,
performance improvement, and contract compliance opportunities. It is part of an overall spend management and visibility process that includes
the analysis and monitoring of government spend.
Generic spend analysis enables one to answer the following questions:
- Who is buying? (Government institutions)
- What? (Items, goods, categories of goods, services, etc.)
- From whom? (Suppliers)
- When? (How often?)
- Where? (Global / Local?)
- At what price? (Baseline)
This provides a structured approach for the identification and selection of sourcing and cost optimisation strategies.
Other things you can do with a spend analysis