What exactly is spend analysis? And at what cost?

December 17th, 2010

You all know this is a bug in my bonnet. Do these expensive spend analysis tools achieve the primary objective of on demand e-negotiation tools which is to reduce costs immediately.

For as many simple yes answers I get, I gave also give you a handful of tools that do a lot of analysis and at the end of the day that is what you have. Simply put, spend analysis is designed to provide companies detailed information about the entire companies purchasing data. The cost to get at that data is astronomical.

At the surface this seems to be pretty simple. In fact it is anything but. If we just look at the retail space, spend analysis relies on data from a number of disparate systems. Most retail organizations to this day do not have a single source of information or an enterprise data warehouse where data is available in one location for use by many applications. In mid tier retailers this is almost universal.

In fact in many retail organizations the following systems would require access in order to gain all spend data necessary for analysis by advanced real time analytics and workflow management systems.

1. Retail ERPS Systems
2. Retail Planning Systems
3. Merchandise Management Systems
4. Supply Chain Management and Execution Systems
5. Store Operation Systems
6. Corporate Administration systems

Certainly, if access to this data is available benefits such as instant access to information and better decision making are certain benefits that can be derived from these types of solutions.

The question for most however is how much time is required to conduct this integration. Would retailers be required to create another data repository and is a data mart of this sort really required to drive savings to the bottom line the shortest amount of time?

For many organizations, there are e-negotiation solution providers that offer these same analytics in the form of a professional service that is embedded in their event pricing. This may result in a more expeditious time to market and savings that can impact the organizations bottom line in the present reporting period.

All solutions do not fit all industries and there are generally alternatives worth exploring that may fit your needs more closely at a more economical price point.

We appreciate and look forward to your comments

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