Spend analysis is the systematic collection, cleansing, normalization, categorization, and analysis of data to extract insightful reports and act on them, i.e., adjust the procurement strategy or improve specific procurement KPIs.

It helps uncover hidden costs and dark purchasing by offering a clear overview of where, how, and for what the spend goes. It spans the entire organization’s spend and analyzes direct and indirect procurement to spot and eliminate maverick spend. It offers the necessary data to track procurement KPIs and demonstrate the ROI of procurement effectively.

The other benefits of spend analysis include cost savings opportunities, supplier relationship improvement, enhanced regulatory compliance, and boosting the efficiency of the procure-to-pay process. It even acts as a foundational step in strategic sourcing by offering the necessary details to create sourcing plans, conduct RFQs, and more.