Insights & Ideas

Creating Spend Intelligence is a Tough Job, But Essential

It has been said that some jobs need to be done because they are hard – and this is one adage that is right!

Creating spend intelligence is a hard job. But as I have written in previous posts, driving your strategic sourcing efforts with actionable spend intelligence will give your company a competitive advantage.

Spend intelligence is created in a constantly on-going process. The Spend Intelligence Cycle consists of 8 stages:

  • Planning,

  • Data Collection,

  • Data Cleaning & Collation,

  • Data Enrichment,

  • Data Categorization,

  • Data Analysis,

  • Spend Intelligence Reporting

  • Maintaining the Cycle.




Challenges in the spend intelligence cycle

Specific challenges in each stage of the spend intelligence cycle include:


  • In the Planning stage you will establish what Procurement management wants to learn from the spend intelligence report. You may face pressures to do the exercise quickly and only to identify “quick-fix” problems, instead of taking longer to provide strategic insights. You may also find that current data quality restricts the possibilities to plan for a high-quality spend intelligence report.

  • In the Data Collection phase you may face resistance across a decentralized organization from the staff whose job it is to deliver the data to you.

  • In the Data Cleaning & Collation phase you may note that the data you received is of bad quality.

  • In the Data Enrichment phase, bad data quality restricts how you can enrich the data for added insights.

  • In the Data Categorization stage you may face challenges in finding relevant stakeholders to validate your categorization.

  • The fewer challenges you face in the five previous phases, the easier the Data Analysis phase will be.

  • In the Spend Intelligence Reporting phase, you need to find a proper method for communicating the analysis results to various stakeholders (whether this is visually, or in another way).

  •  And finally, in the Maintenance phase you may find that staff turnover restricts the future quality of the spend intelligence cycle.






Start of a new series on Rapid Labs

These are some of the challenges that you are likely to face when implementing the spend intelligence cycle, but, in your implementation work you should not be discouraged by how many challenges you face, you should focus more on how to deal with those challenges.


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