Dont waste time building a spend cube! AVOID!

Описание: Everything you have been told about Procurement Spend Analytics is wrong!



You are wasting your time if you are still chasing or spending dollars on building a Spend Cube.



Spend Cubes are old, provides extremely narrow focus and backwards looking. Additionally, Spend cubes have never worked for indirect spend where the information is not present. As far as the Direct spend information is concerned, well, it is already available in perfectly structured reports, well before the spend cubes! 90% of the features/dashboards of spend analysis tools are not used beyond data export in excel!



Most importantly, spend cubes can only provide you with what has happened in the past and rarely provide answers on what is about to happen. There is no pattern analysis and hardly any useful insight for building a category strategy! So, STOP wasting your time and money on anyone selling you Spend Cube. It is ridiculous to have this in 2022.

Instead, Procurement Analytics is much more than Spend Cubes! So, why not see what is required to build an effective spend analysis? Here is my step-by-step approach. Before starting anything, It is important to understand where you want to go. For this exercise, I want to do the following:



1.) Do I know my upcoming demand?

2.) Which Suppliers should I invite?

3.) How do I know I have the best deal?

4.) Did Whether Supplier performs as promised?

5.) How do I identify cost-saving opportunities?



You can have your metrics. But for now, let's proceed with these 4.



Starting with 1st: Do I know my upcoming demand?

I am assuming here that the business team has not provided you with any

You need to have your ERP data with you. Using the PO dates, prepare a heatmap in excel according to PO date and Quantity.

If you have granular data on demand, you can attempt to build a time series forecasting for demand. However, the heatmap should provide you with an excellent baseline to start with.

After you get the heatmap, engage with your business team to confirm the volume.

Study the market trends, and if the prices are projected upwards, you can negotiate the volume beforehand.



In my next video, I will speak about how you can know which supplier you should invite in a sourcing event process!





#procurement #Supernegotiate #spendanalysis