We continue seeing Spend Visibility customers mature and look to their solution to provide increasing complex analysis of their spend. Recently I've had various discussions with customers interested in better understanding the components leading to spend variance over time. There were two common components to this:
1-What is causing my spend to vary?
2-What impact will various actions have on my spend profile?
We first saw the interest to break out volume (changes in how much I buy) and price effects (changes in the prices of what I buy). More recently, and undoubtedly due to increasing exchange rate volatility in recent years, the effect of exchange rates has grown in interest. Understanding how such factors impact your spend is obviously important to accurately forecasting spend, but it also enables you to better mitigate risk (ex. hedging to minimize exchange rate exposure) and potentially better focus your cost reduction activities (whether demand management, non-compliance or sourcing will have the greatest impact on costs). As we continue to strive to meet all spend analysis needs in our solution, we would be very interested in hearing from companies on:
1-Whether you perform this type of analysis of spend variance?
2-What other elements you dissect or feel are important to dissect?
I'd also encourage anyone to share challenges or successes you have had for other community participants.