Spend Management

Spend Analytics

The first step towards achieving cost savings is spend visibility and developing the savings plan. Spend Analytics is crucial to both of these

Leverage Spend Analytics as the Foundation for Savings

Leverage Spend Data for savings
Spend Analysis Goes Well Beyond An Effort of “Organizing” Transactional Data

The spend analysis and sourcing opportunity assessment is the initial phase of any strategic sourcing initiative. Velocity has performed over 545 sourcing engagements which has produced an excess of $800M in realized cost savings for clients.

Spend analytics solutions and procurement consulting services help identify and capture cost savings via benchmarking, strategic sourcing, and negotiation

Comprehensive Data Analysis

  • 01

    Determine source files for raw data
  • 02

    Review current data usage and assumptions
  • 03

    Delete incorrect and/or duplicate data and standardize names and GL accounts
  • 04

    Using leading tools, categorize data according to taxonomy
  • 05

    Work with suppliers and stakeholders to obtain all agreements and analyze the commitments
  • 06

    Conduct internal and external analysis, benchmark against the industry and competitors
  • 07

    Segment sourcing savings and opportunity wave plans
  • 08

    Develop formal recommendations and business cases

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Tried & True Methodology for Estimating Opportunities for Sourcing Savings

Leveraging the spend analysis, it’s important to evaluate existing spend management activities. This includes current contracts, in-flight initiatives, key supplier relationships etc. in order to develop a comprehensive list of opportunities. The purpose of the savings opportunity assessment is to gather all information necessary to decide how spend categories should be managed and what approach to take: Strategic or Accelerated sourcing, Quick-Win Bidding or Tactical Procurement. 

Savings Opportunities are Best Defined by the Following Factors

Total Annual Spend
# of Suppliers Top 80%

Product Differentiation

Last Sourced Timing

External Trends

Maverick Spend

Level of Quality

Buyer VS Supplier Power

Cost Competitiveness

Leveraging the Results

The final deliverable of the spend analysis and opportunity assessment is a detailed spend management opportunity report. Each spend category will have its own recommendation on how to improve spend management and how to achieve cost savings.

100% Financial visibility on the spend

Clear path forward on how to achieve savings and by when

Plan of attack, including project schedule and required resources

Executive summary for internal buy-in and justification
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