Spend Analysis

Spend Analysis

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Institution

Spend analysis can be defined as the process by which expenditure data is collected, categorized and evaluated by use of either a given software or the human hand (Pandit & Marmanis,2008). Companies that perform spend analysis will normally do so for varied reasons that may include but not limited to:

In order to maximize their profits by identifying areas of wasteful expenditure and setting aside contracts that can be reviewed (Bragg, 2010) profitability is in most cases the core motivation for most of the organizations. Companies will also engage in spend analysis so as to improve compliance and reduce cycle times, a detailed spend analysis will enable organizations to discover other areas of savings that have previously gone untapped, and develop areas that have been proven.

Spend analysis programs such as Oracle Procurement & Spend Analytics do provide the flexibility, functionality, and extreme ease of use that is required for the attainment of the needs of procurement professionals in the entire organization. The analysis programs create powerful synergies for the procurement processes, the processes in turn then ensure a rich operational and management insight that helps to direct all sourcing initiatives, supplier, customers and financial decisions in the following: effective lowering of costs, increasing revenue, and raising the profitability.

The Six Sigma methodology is a meticulous way that makes use of information management by facts and statistical analysis for the definition, measurement and improvement of a given company's operational practices, systems and performance. The six sigma methodology will identify and prevent "defects" in the manufacturing and service-related processes in order to anticipate, and achieve or exceed total customer satisfaction.

Across numerous industries, companies normally face excessive pressure to reduce costs and maximize efficiencies. This translates to...