It shows the best of practices, it shows the worst of practices. The epic tale of the Spend Analysis journey across two enterprises, illustrated.

1. Sources: Aberdeen Group; Best Practices in Spend Analysis: Cure for a Corporate Epidemic (2004); Spend
Analysis: Working too Hard for the Money (2007); Spend Analysis: Pulling the Cover Back on Savings (2008); Spend
Analysis: Transforming Data Into Value (2009); Spend Analysis: The Nexus of Spend Management (2011)
Coming soon: “Great Sourcing Expectations”
Find out: ariba.com/go/analyze-your-spend
WHAT WOULD YOU DO WITH
SPEND ANALYSIS?
Strengthen their contract
negotiation position
46%
Prioritize top
spend categories
63%
Identify and
forecast savings
67%
That’s why 81% say they would use spend analysis to boost
processing efficiency and cut costs. Specifically, they would:
lack adequate
spend analysis skills27%have insufficient systems in
place for automated analysis45%
Amount organizations collectively lose every year because...
$260 BILLION
EPILOGUE
...who all now understand how automated analysis reveals
the spending costs, risks, and opportunities within their areas.
Finance - Manufacturing - Accounts Payable - IT
Procurement - Product Support - Legal - Audit and Compliance
...making him a hero to his colleagues in...
from increased spend
under management$8.5M
From strategic
sourcing initiatives$3M
From contractual
compliance$7.5M
Every $500 million of his spend
that’s captured in analysis translates
to incremental savings of...
Greater risk of supply
chain disruption
Fewer volume discounts
Leaked savings from noncompliance
and maverick spending.
Slow, inefficient sourcing processes
Limited visibility into spending
and suppliers
And is doomed to...
Sourcing
savings
17%Cost-avoidance
savings
9%
...and as a percentage of
total spend, increases of...
Contract
compliance
76%Spend captured
during analysis
96%
While this purchasing
manager enjoys...
Sourcing
savings
5%Cost-avoidance
savings
5%
...and as a percentage of
total spend, increases of...
Contract
compliance
35%Spend captured
during analysis
55%
This purchasing
manager achieves only...
It automates the classification,
enrichment, and analysis of
company-wide purchasing data.
This helps him answer his questions,
review supplier information, and
benchmark his spend performance
against market and peer data.
He finds out that data formats, details,
and quality vary widely, and has a hard
time collating and comprehending it.
This labor-intensive effort eats up...
30% - 50% of his time
12% - 15% of his sourcing cycle
As a result...
This manager implements an
automated spend analysis solution.
This manager tries to
gather and analyze data manually.
But they each take
a different course of action...
suffer from too
many incompatible
data sources
44%
struggle with
poor data quality
40%
of companies rely
on paper and pencil
to classify spend
60%
Now, like many, they face significant obstacles...
Are we facing
supplier risks?
Are we compliant with
our policies and
contracts?
Could we negotiate
better to save money?
What are we buying?
From whom? How often?
How much? At what cost?
To begin, they’re asking
the same questions...
If you could see and analyze it all, you could spot ways to reduce costs
and supply risks. Realize negotiated savings. And make more confident decisions.
But getting a firm grasp on your spending is a heck of a challenge. It needn’t be.
To illustrate, let’s take a look at how two purchasing managers
tackle the problem.
Your company spends
a lot of money.
PURCHASING MANAGERS
A TALE OF TWO