In their efforts to tackle new categories of spend to manage strategically, procurement professionals need to wear two hats - analyst and politician.  As an analyst, spend data must be dissected and examined in order to identify potential categories where sourcing efforts may drive savings.  This is the easy part.  Once a category has been identified, the next step is often opening a dialog with the spend owner in order to make the case as to why the company and his/her functional area can benefit from more strategically managed spend.  Accomplishing this task can take a fair amount of discussion and persuasion...and quite often, the skills of a seasoned politician.

 

The role of spend analysis is step one is not surprising.  Savings opportunity identification is often the primary objective of newly deployed spend analysis programs.  However, having improved spend analysis capabilities may also assist with becoming a better, more informed politician.  At Ariba's most recent Spend Management Day in Los Angeles, a VP of Purchasing at a media/entertainment company shared that the information his group now culls from their spend analysis program has been key in opening doors for the discussions necessary to manage spend in completely new areas of the business.  Something else to consider when making the case for improved spend visibility.