Spend Analysis

Assignment: Goods Spend Analysis in My Organization – Company N

The objective of this essay is to describe components of a goods spend analysis in the organization that I am currently working for - Company N. It is composed of three major components: the steps I would use to conduct goods spend Analysis in Company N, the specific key triggers and how spend analysis would fit with the organizational procurement strategy. I will apply the appropriate concepts and tools from the Session 1 of this Module to analyze the components above and provide detailed explanations.

I. The steps I would use to conduct a goods spend analysis for my organization

In my organization I am not aware of a Spend Analysis Tool/Database set up to perform the spend analysis. Therefore, the entire process will require a lot of manual efforts; however, purchasing a tool is one of my recommendations in order to improve the business efficiency.

Step 1: Identify the goal of spend analysis and communicate it to the team who will be conducting the analysis.

The goal is primarily to capture accurate understanding on the spend and identify any cost-saving opportunities.

Step 2: Collect data on spend.

Any data such as A/P data, invoice data, PO/Contract commitment data, expense data, can be relevant to Spend Analysis. Currently my organization is utilizing two tools for Accounting, Finance, Project Control and Supply Chain: Unifier and JD Edwards. Both tools have the feature of running reports to capture the cost/spend, given what was requested. At this stage the Finance/project accountants need to run a report from Unifier on all spend. JD Edwards analyst will create a report from JDE individually. At this time JDE is only utilized for Corporate Spend.

Step 3: Sort the Data by commodity.

The data extracted from two different database needs to be manipulated or sorted out according to the categories. At this stage of our refinery project, I recommend to consider a “commodity” as a...