Procurement Spend Analytics Definition
Procurement spend analytics is the process of analyzing an organization’s procurement data to identify trends and opportunities for cost savings. The data used in procurement spend analysis can come from a variety of sources, including invoices, purchase orders, contracts, and supplier performance reports.
Procurement spend analytics typically begins with the aggregation of this data into a central repository. Once the data is collected, it can be cleansed and normalized to ensure that it is accurate and consistent. After the data has been prepared, it can then be analyzed using a variety of methods, including descriptive statistics, regression analysis, and cluster analysis.
The results of the procurement spend analysis can be used to develop strategies for reducing costs and improve supplier performance. Additionally, the findings can be used to negotiate better prices with suppliers and improve contract terms.
