The Importance Of Spend Analysis

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The Importance of Spend Analysis John Doe BUS307: Operations Management & Quantitative Techniques Instructor Alex Lazo November 21, 2011 How important can thinking and data analysis be the process of spend analysis? Data Analysis is a process where data goes through a transformation with the goal that the most useful information will be identified. During this process suggested conclusions and supporting decisions are being made. The spend analysis process is a process where spending patterns, irregularities and cost savings are examined carefully by a skilled purchasing team. Spend analysis is not automatically computer generated; however, the use of sophisticated software is used in some companies such as Excel spreadsheets and Access database. It is very important to be able to analyze spend. Sometime in order to save money you must spend money. Spend analysis software is available but can initially be very costly but the investment promises big returns. Data analysis and thinking skills are very critical to the spend analysis process because the staff that is responsible for the spend analysis must have the ability and skills needed to process large amounts of data. Because there are large amounts of data to process and the data analysis process has the ability to transform and identify the useful information, this makes it very critical to the spend analysis process. A structured process, such as the Six Sigma methodology, would be very useful in the process because Six Sigma is a business improvement methodology. Six Sigma focuses on the understanding and management of customer requirements, the alignment of key business processes in order to achieve those requirements, the utilization of very important data that understands and minimizes the variations in those processes and it drives fast and sustainable improvements to the business
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