Being able to visualize your spend means being able to take control of it, and create the agility to address organizational goals and challenges going forward. Organizations often find it hard to control spending due to decentralized procurement data either in different systems, departments or even in different plants. Each having local stock, local administration, local applications and local P&L and handling their own procurement. They purchase services, materials and parts at multiple vendors using both well-defined purchase orders and free text orders with inconsistent data.
Not being able to visualize your spend leads to challenges such as:
- Same items are purchased multiple times
- Lack of transparency
- No clear pricing per item and difficulties to optimize pricing
- Unable to confront suppliers with wrong deliveries
- Unnecessary long lead times
And, more importantly, not being able to tackle these challenges can lead to other problems like having difficulties in consolidating spent and reducing supplier base, being dependent on vendors who have more insight in items used than yourself, and having the issue of creating double master data items constantly. Spending money on thousands of services and materials at hundreds of suppliers leads to a great number of purchase orders that all have their overhead and need to be managed. It leads to a lot of unstructured and decentralized data which makes it difficult to optimize.
Why global visibility in spend is key
Global visibility in spend creates the ability to have a comprehensive view of the metrics that drive improved cost savings, process efficiency, and supply-chain performance. Having insight in the spend of your organization will provide the ability to increase the efficiency in the procurement processes and realize financial benefits. It will help answer questions such as:
- What did we buy?
- How much did we buy?
- Where did we buy it from?
- Did we buy too much?
- Did we buy too often?
- Did we buy the same things at different suppliers?
- Can we spend less?
- Can we save money?
All these questions can be answered if you have insights into your company’s spend data. By centralizing the data and making it accessible for analysis it will provide means to answer the above-mentioned questions, visualize the results, and provide data driven insights to support the decision makers as well as the employees who are responsible for procurement. Global spend visibility will increase the alignment of supply and demand. It will drive these and other advantages. It will unlock value in your supply chain and streamline workflows and processes.