{"id":30219,"date":"2019-02-07T06:09:56","date_gmt":"2019-02-07T06:09:56","guid":{"rendered":"https:\/\/simfoni.com\/analytics\/?p=30219"},"modified":"2025-02-10T08:51:37","modified_gmt":"2025-02-10T13:51:37","slug":"what-is-spend-analytics-why-and-how-it-is-implemented","status":"publish","type":"post","link":"https:\/\/simfoni.com\/spend-analytics\/what-is-spend-analytics-why-and-how-it-is-implemented\/","title":{"rendered":"What is Spend Analytics? Why and how it is implemented?"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"30219\" class=\"elementor elementor-30219\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"has_eae_slider elementor-section elementor-top-section elementor-element elementor-element-235d14be elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-eae-slider=\"7678\" data-id=\"235d14be\" data-element_type=\"section\" data-e-type=\"section\" data-settings='{\"pix_scale_in\":\"none\"}'>\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_eae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-224463a2\" data-eae-slider=\"42430\" data-id=\"224463a2\" data-element_type=\"column\" data-e-type=\"column\" data-settings='{\"pix_scale_in\":\"none\"}'>\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-3faa2998 elementor-widget elementor-widget-text-editor\" data-id=\"3faa2998\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<h1><strong>What is Spend Analytics?<\/strong><\/h1><p><strong>Spend Analytics<\/strong> is the discipline of collecting, processing, and analyzing <a href=\"https:\/\/simfoni.com\/procurement\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Procurement\" target=\"_blank\" rel=\"noopener\">procurement<\/a> data. <strong><a href=\"https:\/\/simfoni.com\/spend-analysis-guide\/\" data-internallinksmanager029f6b8e52c=\"23\" title=\"Spend Analysis\" target=\"_blank\" rel=\"noopener\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Spend analysis<\/span><\/a><\/strong> uncovers business buying patterns through an in-depth review of procurement data. Organizations use these to manage their suppliers, to track procurement performance, and to decrease cost. Often the terms are interchanged, though the analysis is one (important) step of many in the analytics process.<\/p><h2><strong>Why is the Spend Analytics important?<\/strong><\/h2><p>Spend Analytics brings together purchasing-related data and turns it into immediate, <span class=\"\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>budget<\/span>-saving opportunities. The analysis also generates KPIs to assist decision-making. It provides visibility into an organization&rsquo;s purchasing trends and offers useful insights. Spend analysts can improve supply management by reducing risk and ensuring compliance of any supplier. And measure and benchmark the flow of the end-to-end <a href=\"https:\/\/simfoni.com\/procurement\/\" target=\"_blank\" rel=\"noopener\"><strong>procurement<\/strong><\/a> process against peers.<\/p><p><strong>Typical procurement improvements:<\/strong><\/p><ul><li>Increased visibility on category <a href=\"https:\/\/simfoni.com\/sourcing\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Sourcing\" target=\"_blank\" rel=\"noopener\">sourcing<\/a> patterns<\/li><li>Gain insights for <a href=\"https:\/\/simfoni.com\/strategic-sourcing\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Strategic Sourcing\" target=\"_blank\" rel=\"noopener\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">strategic sourcing<\/span><\/a><\/li><li>Better oversight of supply chain processes<\/li><li>Reduction in supplier risk<\/li><li>Nurture effective supplier relationships<\/li><\/ul><h2><strong>How can Spend Analytics support Procurement?<\/strong><\/h2><p>It answers core questions to improve the financial efficiency of a company.<\/p><ol><li>How much money does the company spend?<\/li><li>Which supplier provides which goods or services?<\/li><li>Is the organization getting what it expects for the purchase or contract?<\/li><\/ol><p>Purchasing patterns are easier to see on <span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">dashboard<\/span>s, charts, and tables. Often these are static presentations or spreadsheets with errors. Rather than use legacy office applications, analysis tools provide a variety of dynamic visualizations that allow data exploration through filters and drill-downs.<\/p><p>One way to show the data is by the procurement category. Category-specific data allows category managers to use their expertise for <a href=\"https:\/\/simfoni.com\/cost-reduction\/\" data-internallinksmanager029f6b8e52c=\"17\" title=\"Cost Reduction\" target=\"_blank\" rel=\"noopener\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">cost reduction<\/span><\/a>, supplier consolidation, and contract coverage.<\/p><figure id=\"attachment_32876\" aria-describedby=\"caption-attachment-32876\" style=\"width: 1542px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis.png\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-32876\" src=\"https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis.png\" alt=\"Category Spend Analysis\" width=\"1542\" height=\"829\" srcset=\"https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis.png 1542w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-300x161.png 300w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-1024x551.png 1024w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-768x413.png 768w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-1536x826.png 1536w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-65x35.png 65w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-149x80.png 149w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-394x212.png 394w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-915x492.png 915w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-1240x667.png 1240w, https:\/\/simfoni.com\/wp-content\/uploads\/2019\/02\/Category-Spend-Analysis-20x11.png 20w\" sizes=\"(max-width: 1542px) 100vw, 1542px\"\/><\/a><figcaption id=\"caption-attachment-32876\" class=\"wp-caption-text\">A spend category is the logical grouping of items or services at an organizational level. With Simfoni&rsquo;s Spend Category Analysis Console, you can easily analyze major sourcing categories at an in-depth level to monitor compliance and pricing accuracy.<\/figcaption><\/figure><h1><strong>What happens under Spend Analytics?<\/strong><\/h1><p>Spend analytics helps optimize the procurement performance of any organization by integrating information from <a href=\"https:\/\/simfoni.com\/sourcing\/\" target=\"_blank\" rel=\"noopener\"><strong>sourcing<\/strong><\/a> data, cleaning it for accuracy, and categorizing to item level. The business, operational managers, and procurement professionals can make better, actionable decisions for their organization using spend analytics software with reliable data and deep classifications. <span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Cost savings<\/span> are a common goal for this process. Most organizations are increasing the time spent analyzing the process, using the analysis software to understand their spending patterns better, to identify future savings opportunities, and to increase <a href=\"https:\/\/simfoni.com\/procure-to-pay\/\" data-internallinksmanager029f6b8e52c=\"25\" title=\"Procure to Pay\" target=\"_blank\" rel=\"noopener\">Procure-to-Pay<\/a> efficiency.<\/p><p><strong>To successfully execute the process, you need to consider the following steps.<\/strong><\/p><ol><li>Retrieve procurement data.<\/li><li>Validate data is complete and accurate.<\/li><li>Cleanse data and normalize suppliers.<\/li><li>Place data by category into a deep, standardized taxonomy.<\/li><li>Enrich data with <span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">metrics<\/span> and benchmarks.<\/li><li>Analyze data with an analytics solution that provides good visibility and instant insights.<\/li><li>Identify potential savings opportunities, process efficiencies, and options for contract creation or re-negotiation.<\/li><\/ol><p>To receive more value, work hard to get accurate, granular data from your records. Using an AI-powered platform, such as Simfoni&rsquo;s Spend Analytics, data cleansing and categorization time dramatically decrease while data accuracy increases. SaaS <a href=\"https:\/\/simfoni.com\/procurement\/procurement-analytics\/\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Procurement Analytics\" target=\"_blank\" rel=\"noopener\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">procurement analytics<\/span><\/a> can also provide analysis solutions that automatically identify common cost-saving strategies, such as vendor consolidation, volume discounts, and <a href=\"https:\/\/simfoni.com\/purchase-price-variance\/what-is-purchase-price-variance-why-and-how-is-it-calculated-ppv\/\" data-internallinksmanager029f6b8e52c=\"15\" title=\"Purchase Price Variance\" target=\"_blank\" rel=\"noopener\">purchase price variance<\/a>.<\/p><h2><strong>Implementation of Spend Analytics<\/strong><\/h2><p><span style=\"color: inherit; font-family: inherit; font-size: inherit; font-style: inherit; font-weight: inherit;\">When done manually or with out-dated tools, the data preparation process can take months, which limits the frequency of use. With AI-driven SaaS solutions, the process can take weeks or even days and achieve more accurate richer results. As companies make the switch, Spend Analytics is moving from a once a year check to a quarterly or monthly review. As procurement analysts, business leaders, and management apply the actionable insights, it can become an everyday tool to understand the past and help predict future spending and future saving.<\/span><\/p><p><a href=\"https:\/\/simfoni.com\/contact\/\">Contact us<\/a>&nbsp;today to learn more about processes that can help your organization deliver using Simfoni&rsquo;s best-in-class&nbsp;<a href=\"https:\/\/simfoni.com\/spend-analysis\/what-is-spend-analysis\/\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Spend Analysis<\/span><\/a>, <a href=\"https:\/\/simfoni.com\/savings-tracking\/\" data-internallinksmanager029f6b8e52c=\"14\" title=\"Savings Tracking\" target=\"_blank\" rel=\"noopener\">Savings Tracking<\/a> &amp; <a href=\"https:\/\/spendautomation.com\/\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Tail <span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Spend Management<\/span><\/span><\/a>&nbsp;Technology Solutions.can<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>What is Spend Analytics? Spend Analytics is the discipline of collecting, processing, and analyzing procurement data. <span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\"><span class=\"\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Spend analysis<\/span><\/span> uncovers business buying patterns through an in-depth review of procurement data. Organizations use these to manage their suppliers, to track procurement performance,&hellip;<\/p>\n","protected":false},"author":1,"featured_media":33791,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"give_campaign_id":0,"footnotes":""},"categories":[440],"tags":[464,468,517,518,519,514,520,467],"class_list":["post-30219","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spend-analytics","tag-spend-analysis","tag-spend-analytics","tag-spend-analytics-dashboards","tag-spend-analytics-kpi","tag-spend-analytics-services","tag-spend-analytics-solution","tag-spend-analytics-tool","tag-spend-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Spend Analytics? Why and how it is implemented?<\/title>\n<meta name=\"description\" content=\"Spend Analytics is a process of gathering procurement data and organizing it so that it can be visualized and analyzed. Spend Analysis deep dives into procurement and expense data to analyze and understand the spending patterns of any business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/simfoni.com\/spend-analytics\/what-is-spend-analytics-why-and-how-it-is-implemented\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is Spend Analytics? Why and how it is implemented?\" \/>\n<meta property=\"og:description\" content=\"Spend analytics is a process of gathering procurement data and organizing it so that it can be visualized and analyzed. 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