How to Customize Your Procurement Spend Analysis Dashboard
One of the most important functions in procurement management is the procurement spend analysis process. This is where you will take a deep look at how your organization spends money, but performing an excellent spend analysis does much more than that.
Having a procurement spend analysis dashboard as part of your procurement software suite is vital because this will be part of the command center. You will always have quick access to view spend and monitor compliance with preferred suppliers by your organization.
However, if you’re new to spend analysis or are not sure how to customize your procurement spend analysis dashboard, there are a few things to note. Of course, each dashboard will look slightly different with each type of software, but there are must-haves you should have on every procurement spend analysis dashboard.
What Are the Spend Analysis Steps?
Generally, when you perform a spend analysis, you will go through a series of steps. You will do this through your procurement spend analysis cleansing process or your procurement spend analysis dashboard via whichever software you’re using. However, if you’re new to the world of spend analysis, having the general concepts down is a good starting point. When you conduct a spend analysis, you’ll want to:
- Know where all your information is coming from. Before you begin to gather your spend data, you’ll need to identify all your known sources so you don’t have to add more data later.
- Gather all of your data. Make sure all of your data is in a centralized location and bring all of it together.
- Cleanse all of your data. Cleaning data means that all of it is uniform, that there aren’t missing fields, that all the currencies are the same, that all instances of a supplier have been normalized and so forth.
- Group data by supplier. If you have more than one data source, you could have multiple instances of the same supplier.
- Categorize your data. There are already existing classification systems that you can use, such as UNSPSC and ECLASS, or you can use your own, provided that you can interpret the data after the reports are finalized.
- Analyze the data. You will typically analyze the data in the form of a spend cube, which will give you several different spend views so that you’re able to make informed decisions. For most best-in-class spend analysis solutions, you can save your views allowing you to see your spend in meaningful ways for your organization.
- Make decisions. Based on the data you’ve now processed and analyzed, you can make more informed decisions regarding the budget and spend at your company.
What Should Be on Your Procurement Spend Analysis Dashboard?
When it comes to your actual procurement spend analysis dashboard within your software, there are some musts you should include so that you’re always able to visit areas quickly. One of the first things you should have on your dashboard is a heatmap graph. What it includes is all of the spend categories. It can help show you which categories have the highest spend, which can be very helpful at a glance.
The next thing you should have on your procurement spend analysis dashboard is a location map graph. This may sound simple enough, but this will show the location of you and your suppliers. It would be best if you have a waterfall chart on your dashboard, but this will be a chart to customize yourself based on your chosen parameters. For instance, you may want to run a Pareto analysis.
The last thing you should have on your procurement spend analysis dashboard is a spend by the general ledger. This may look more like a list than anything else, but it may be something you want to look at frequently if you’re going to check something.
What Are the Benefits of Spend Analysis in Procurement?
There are quite a few benefits of spend analysis in procurement. Some of the more critical ones include:
- Insight into spend. When you have a clear understanding of your spend, you can make better-informed decisions regarding which categories to prioritize for your company.
- Risk management. Having access to spend analysis reports and methods helps you mitigate risks, especially when you can view spend by risk categories.
- Compliance. You can more easily monitor the spend across the organization to ensure that all locations are buying from approved suppliers.
Overall, you’ll increase the impact your procurement team delivers with improved visibility to your spend and spend compliance across your organization.
To learn more about how to customize your procurement spend analysis dashboard or request a demo, contact EC Sourcing Group today at 973-936-9672. We want to help you reimagine the way you think about simplifying procurement.