How to reduce costs using procurement spend analysis?

To reduce costs in a procurement process, stakeholders can start with a spend analysis. It helps collect and categorize historical spend data to identify spending trends and patterns. The extracted data is then cleansed and normalized either through manual effort or using procurement tools.

The data cleansing and normalization will help uncover hidden expenses like dark purchasing and inherent inefficiencies in the supply chain. Both direct and indirect purchasing can offer opportunities for cost savings by identifying opportunities to negotiate volume discounts, consolidate purchases, or switch strategies based on data-backed insights.

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