Spend Analysis

Spend analysis is the process of collecting historical data by commodity, relative to demand from the lines of business, with the exception of personnel expenses, occupancy, and corporate spend. The data should go into the appropriate level of unit-level detail required for analysis and commodity management, and should also be rolled up at an aggregate level on every element of what we spend. The result is a common understanding of historical spend relative to demand from each end user within an organization, based on accurate information collected through defined and automated procure-to-pay systems. Spend analysis requires that you drive all spend to a UNIT of consumption and a RATE of consumption. The output of spend analysis is used to drive demand management, commodity management, and risk management strategies. It is fundamental to communicate to the business partners to ensure understanding of where they spent their money and why it was spent.