There are arguably many components to sourcing success, but in my opinion, the most critical one has to be spend visibility, without credible source data, it is nearly impossible to partake in any sourcing activities – it truly has to be the foundation for all sourcing success.
I wanted to share with you a list of the top reasons spend visibility is vital – from the many and varied conversations we’ve had with professional procurement teams over the years, there are benefits that come up time and time again, and I wanted to share this knowledge with you.
Here’s the top 5 benefits of spend visibility:
1. Increased Insight
At its heart, spend visibility is just that – it gives you the opportunity to truly SEE what you are spending. Without having a full and accurate view of your spend, by integrating, cleansing and enriching your data, there is no way that you would then be able to successfully achieve any of your targets set for cost reduction, supplier rationalisation or efficiencies.
2. Data Quality
The most effective spend visibility can only be achieved after ensuring that your data has gone through a process of integration and cleansing. These two steps are vital, as without all of your data in one place, there is no level playing field to be able to identify rogue spend and duplicate invoices (for starters) and without effective data cleansing, you won’t know how accurate your spend analytics is. For example, incorrect address lines can completely misrepresent where you hold most of your spend, and effectively knowing where your suppliers are to be able to identify any risks to your supply chain.
3. Dig Deeper
Effective spend visibility also gives you the flexibility to delve deeper into your data and be led by what the analytics are telling you, rather than being constrained by rigid, inflexible systems and inaccurate data. It means that as a procurement department, you can be driven by your data, rather than using anticipated results applied retrospectively to your data.
4. Ongoing Intelligence
By implementing effective practices for spend visibility, it will continue to pay dividends in the future, by ensuring that your spend data can be refreshed and used as an ongoing source of intelligence, to apply, evolve and transform your sourcing activity.
Spend visibility also ensures that you can effectively measure compliance and easily adjust and refine to achieve compliance targets. Without this visibility, disparate and dirty spend data means that any compliance measurement and initiatives will ultimately fail.
We’d love to hear your thoughts – what has been the biggest benefit for you? And is there any that we’ve missed? Contact us at firstname.lastname@example.org!