Spend Analysis and Spend Management Software
Having
visibility into a corporation’s spending is one of the most efficient methods
to assess a company’s costs, what the money is spent on and how much could be
saved. However, it can be a challenge to track every expense -- especially when
that might include everything from dry-erase markers to new data center
architecture and employee payroll.
In many
companies, complications arise from having a number of different tracking
systems. So even if there is a record of every dollar being spent, it might not
be organized in a way that makes financials easy to evaluate.
That’s
where spend analysis and spend
management software comes in. By using spend management systems, or spend
analysis, as part of a procurement package, companies can organize all their
spending into one system that allows administrators to see what they’re
spending money on. Besides helping to identify savings opportunities, spend
management can reduce supplier risk and improve compliance, according to its
proponents.
While spend management solutions is a pretty
all-encompassing term, spend management software specifically relates to the
system that combines all of an organization’s spending information into one
package for easy analysis. A spend management system usually includes many
separate tools, but they all work together to clarify who a company is doing
business with and what it’s buying. This can help avoid complications like
out-of-contract purchases and compliance issues.
Extra
tools are commonly added to spend analysis systems. One tool might be supplier
management, which can help with regulatory compliance and contract management.
Often, companies will go to different providers and vendors to buy several
pieces which together form a more spend analysis system.
Taking
that route can be more complicated at first, so organizations should keep in
mind that complex spend management systems require significant integration and
customization.
There are
plenty of reasons why spend analysis software is a good investment (compliance,
for example) but the biggest driver for any organization is the one that
affects the bottom line: savings. Identifying savings opportunities can help an
organization be more cost effective in the areas where they’re spending the
most. For many organizations, that’s the IT department.
