Wednesday 25 March 2015

Spend Analysis, The Next Generation: A Blend of Ideas, Innovation and Data

By Josh Goodman

On Wednesday 11th March, we held our debut briefing in the 2015 Real World Sourcing Series. The event saw Peter Smith, Managing Director of Spend Matters UK/Europe, present a forward-focused briefing to a packed room of procurement professionals from a variety of industries and sectors.

Beginning with a broad assessment and overview of contemporary Spend Analysis, the briefing set out to show just how much is set to change with the increasing processing power of technology and eProcurement tools. Interestingly, when asked if anyone in the room was practising current methods, very few seemed to be capitalising on the existing capabilities of spend analysis solutions. As the briefing progressed however, a potential explanation for this limited use appeared – with reservations seemingly stemming from the difficulty and lack of ease in analysing and visualising data by current methods.

Breaking with traditional format, the briefing enjoyed the addition of two members of the BravoSolution team, Scott Pryde and Mike Roberts, who presented a case study on spend analytics within the NHS. It was an engaging and insightful case study that served to highlight the interesting work that is being done in NHS procurement to source the most effective medical items and services.

Fundamental to this, as Scott explained, was the blending of spend data with other datasets from various areas, to bring a new context to the spend data. One such example was feeding in product recall data to see whether the medical devices being procured were in fact the best quality options. This would therefore allow procurement departments in the NHS to understand immediately if there were issues, empowering them with the information to react and begin sourcing a better product from alternative suppliers. More importantly though, the data is delivering the crucial insights needed to better engage with clinicians – an area that’s a high priority on the NHS Procurement agenda.

Another prediction for the future of Spend Analysis had much to do with a more transparent means of future business practices. Much in the same way that we now have price comparison sites that scour the internet for best prices on a product, Peter opined that there would be an opening up of spend and business data, that would in turn allow procurement professionals to compare options from various suppliers and understand if they were receiving the best value available.

Ultimately, what came out of the session was a firm belief that Procurement, with greater technological power and increased connectivity is set to change considerably in coming years. Coupled with the growing technological maturity and confidence of procurement professionals in approaching and handling data, this change will see a smarter use of smarter tools, allowing a more out-of-the-box iterative approach to exploring these immense datasets. This, we felt as a group, will enable procurement professionals to deliver added value to their organisations, and in turn, support the procurement department to position itself as a strategic component of the business.

Don’t miss our next briefing - Category Management, a Fresh Look. Find out more and register here.

Next month, Guy Allen will be taking a fresh look at Category Management to assess where it is presently and where this integral element of Procurement is heading. Casting a keen eye on the impact of eSourcing and data, the briefing will discuss the relevance of Category Management in a commoditised world and its role in localised and globalised marketplaces.

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