If you are currently considering a spend analysis program, ask yourself...what are your goals?  Hopefully, they look something like this:

  • Increasing our spend under management
  • Optimizing our savings per category
  • Rationalizing our supply base
  • Driving improved compliance with approved contracts/suppliers


Those who respond to this question stating, "I want x% of my spend classified" are going down the wrong path.  Spend classification is absolutely a key objective of any spend analysis initiative, and one that should be supported by clear and firm service levels when working with a third party provider.  However, a stated goal of getting 80%, 90%, or 99% of spend classified, too often results in a misguided focus that clouds the real task at hand - improved visibility for increased savings.  Organizations with a stated goal of classified spend often find themselves tied up in an academic exercise that doesn't deliver any real value.  Instead of spend classified, spend time planning how you will leverage the classified/enriched data once available.  Spend classification is the means to an end...not the end game.