Spend Analytics on a Grand Scale
By jcoolidge on Mar 11, 2011
The Wall St. Journal reports in Billions in Bloat Uncovered in Beltway that a recent study by Government Accountability Office (GAO) has released a massive study of several programs and agencies that cost U.S. taxpayers billions of dollars each year. This report help save $100 to $200 Billion dollars by identifying duplicate spending and ineffective programs that can be consolidated or eliminated. Now, that is spend analytics on a massive scale!
It remains to be seen how actionable that information will be. Certainly, there have been studies before that identify wasteful spending. But, it’s a great case of the power of business intelligence and spend analytics. Many companies do find significant savings when they implement spend and procurement analytics.
What makes for an excellent spend analysis? It should be:
- Objective and provide visibility across programs and/or divisions
- A cross functional analysis that links financial with performance metrics
- Prescriptive and actionable
Spend and procurement analytics have been HOT during the economic downturn! I expect 2011 will see many more companies get serious about spend analytics and would love to hear from companies who are willing to share their experience.