Spend Analysis is the process of collecting, cleansing, classifying and analyzing …………………..
Today’s post is by Alex Borbely, Director of Sales at SafeSourcing
While visiting with retailers and manufacturers during the pilot event stage, and watching live events unfolding in front of the client, it is exciting times at SafeSourcing when we show what competition in procurement spend can do. What other solution can a prospect see instant dollar’s fall right to their bottom line in a matter of a 20-minute reverse auction event? SafeSourcing, thus far in 2018, has saved on average 24.5% for our clients. All this falling right to their bottom line. As I said to a new client watching their first reverse auction event this past week, their 22.3% in savings in one reverse auction event goes right to their bottom line. I asked my client, how many new customer cups of coffee would you have to sell in order to see a similar impact on your bottom line? Reality is that selling more in today’s competitive world is difficult without losing margin. Reducing expense on spend with SafeSourcing’s full service events will add to bottom line profitability at a rate of 10X ROI on average. This meaning what you pay for an event in most instances will be multiplied in savings by 10 times or more!
After our typical 2-pilot events are executed and the client witnesses the power of SafeSourcing’s ePROCUREMNT and the reverse auction Event they then ask what’s next? Our typical response is let’s discuss what you spend your money on for both direct and indirect spends. We usually get that deer in the headlights look and hear “well that is handled by many individuals within our organization and we would have to get with them to see if they know how much is spent in each category”. The result is 9 out of 10 responses are that “they don’t know”. This is when SafeSourcing suggests that we engage with the client and together we orchestrate a spend analysis to highlight spend and where SafeSourcing can assist with historical sourcing events results that is the proof of the pudding. Let’s begin by understanding spend analysis:
Definition: Provide top level picture of spend. Spend Analysis is the process of collecting, cleansing, classifying and analyzing expenditure data with the purpose of decreasing procurement costs, improving efficiency, and monitoring controls and compliance. It can also be leveraged in other areas of business such as inventory management, contract management, complex sourcing, supplier management, budgeting, planning, and product development.
At SafeSourcing we use our internal tool and process called SafeSpendAnalysis™
Tomorrow we’ll review the typical steps in a spend analysis during Part II!
For more information on how we can help you with your procurement needs or on our Risk Free Pilot program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today