Experience (and value) that Spend Analysis Vendors Provide, Beyond Internal IT Personnel

February 9th, 2010 at 09:44am David Bush - Iasta

To approve Spend Analysis projects, project Sponsors often need to justify to their management why they need to utilize Spend Analysis providers to do the project, as opposed to internal IT resources.   Some companies may not have this problem in that they don’t have IT resources available, so it is obvious they need to use outside help.  But sometimes there may be conflicts internally.  The simple answer is that internal IT resources usually do not have the focused experience and knowledge regarding the unique data cleansing and classification needed for Spend Analysis.

Internal IT resources typically have…

1. Familiarity with the corporate data sets and applications
2. Familiarity with the Corporate IT environment
3. Familiarity with a Corporate Reporting tool

Internal IT resources likely do not have (and Spend analysis providers have in spades)…

1. Related to (1) above….  IT resources can easily provide data files, but Vendors are more experienced to integrate and reconcile organizational data to specific Spend fields needed to properly drive meaningful Spend Analysis.  Significant relationships exist between Spend data, and vendors know what to look for.  They also have structured tools to process the data effectively.
2. Related to (3) above – IT resources can help with getting cleansed and classified data back into the company reporting environment, if a company reporting tool exists.  Companies can also utilize vendor “Smart” Reporting, which is tailored for detailed Spend visibility and opportunity assessment.
3. Experience with cleansing data – for example, we have over 50,000 cleansing rules built over 12 years across over 200 projects and customers in many industries, already defined.
4. Experience with Supplier Grouping.
5. Experience optimizing Supplier data enrichment from vendors such as CVM Solutions or D&B.
6. Experience with data classification, handling numerous taxonomies for analysis, and grouping Spend data into meaningful sourcing categories.  For example, we have a master library of over 100,000 master rules for items and categories we have seen across all those projects mentioned above.
7. Experience with structured data “refresh” and handling the nuances of combining, re-cleansing, re-grouping, and reclassifying data with rigor to all the taxonomies in use.
8. Experience in foreign languages and associated data processing and translation.
9. Experience in mining and reporting in-depth level s of “savings opportunity assessment and identification” versus basic pivot tables and cubes.
10. Internal IT resources usually do not have authority across divisions and countries to get data, so a vendor can help to make the integration and change happen.

Spend Analysis vendors provide focused tools and resources to implement advanced Spend Analysis within your organization, and can be utilized effectively in place of internal IT resource.  And the cost is usually less than 1 or 2 full time equivalent headcount, which is a bargain as you discover savings opportunities.

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Entry Filed under: Functionality, General, Outsourcing, Spend Analysis, Supply Management Best Practices