Self Employed Purchasing Professionals

The answer to simple questions is often hard to give. What you ask is what you get.

Just off the record, I would like to start with filosofy. Spendanalysis is a kind of tangible filosofy (would love to know).

What is your question?

What is your goal?

Why would you like to have an answer to it?

How would you know the answer is correct, complete and consistent with your question?

What are you planning to do with the answer?

I did some reviewing on the same question (what would you like to discover with a spendanalysis) within a peer group of 200 self employed procurement professionals in NL.

Here are some quotes and lists:

Simplify:

- what do we buy

- why (goal)

- for who

- from who

Try quick and dirty, fast and simple. Clear cut in a couple of days. The deeper you get, the fuzzier you find. Beware of intercompany spend, investments, project spend. Do not spend weeks (or months) on it. There is no such thing as a perfect analysis.

Use the 3 angles: business (unit), supply base (vendors) and categories (classes)

Deal with the figures that you can get, and don't complain about those: figures always lie. Focus, filter and funnel.

If interesting: split out categories and subs.

If not: just focus on big tangible spend.

mention risk-reward- but also time factors.

Forget about existing sourcing plans and methods: just go by GL and interviews with the business.

Do just some simple pivot tables and pie chart things.

As you can see, most professionals are digging for more: more detail, more lists, more lines, more sorts, more safety. You will end up in endless discussions.

If the goal is to "establish a clean baseline, identify the opportunities, source the goods and track the savings" than just keep it simple, give it a start and correct during the action.

Spendanalysis software that can be fed with quantitative input (ERP) and must be 'enriched' by qualitative (risk-reward-time factor) input from the business (reality). The results will only be valuable if they help you reach your goal. So think about that goal first...

I think the output of the software gets cleaner if the system allows finetuning.

hope this helps,

Menno