Gaining insight into where your money is spent is essential for maintaining a healthy bottom line in procurement. Spend visibility is like flipping on the lights—it lets you see exactly what you're spending the most on and where adjustments can be made. But for it to be truly useful, the data needs to be clear and actionable, helping decision-makers stay ahead of the curve and respond quickly when necessary.
In 2024, achieving spend visibility in procurement is a necessity for organizations striving to meet their corporate goals. But what other advantages does spend visibility offer, apart from just saving money?
Procurement teams secure a seat at the decision-making table by harnessing the power of spend visibility. They become instrumental in aligning with organizational goals by leveraging spend data to uncover strategic sourcing opportunities, prioritize investments, and allocate resources effectively—for expansion, sustainability, or innovation.
Enhancing your supply chain starts with optimizing your data. When information is presented clearly and comprehensively, procurement teams establish a clear line of sight into their spend with various suppliers. This clarity empowers teams to make informed decisions and effectively manage supplier relationships, ultimately optimizing procurement processes and driving value across the organization.
“We are in an age where there is so much data available to us. A lot of companies are struggling to navigate all the data and determine what matters or if the data is good quality. Garbage in equals garbage out.”
- Ashley Greuel, Senior Director of Strategic Alliances at OMNIA Partners.
Beyond the immediate impact on your budget, spend visibility serves as a strategic compass for procurement teams, offering insights into where and how funds are allocated. This deeper understanding helps teams identify potential risks tied to suppliers, contracts, or purchasing processes and positions procurement teams as active contributors to the overarching organizational objectives.
One of the biggest challenges facing procurement in 2024 is the need for more time and resources. Spend visibility enables procurement teams to streamline processes, become more efficient, and allocate resources where it makes the most sense. When procurement teams have a complete view of their spend, they have more time to focus on developing a strategic roadmap for change.
“Spend visibility is step one or, rather, step zero in starting and running a sourcing organization. It’s mandatory because it’s your playbook. Without it, it’s like trying to get somewhere without a roadmap; you’re just lost in the dark.” – Reginald Holden | Leonard Green & Partners
Comprehensive spend visibility provides valuable procurement insights, enabling improvements in various aspects, including contract compliance, category management, and corporate initiatives like supplier diversity.
A thorough understanding of a company's spend data improves decision-making, ensuring actions align with company's goals. For instance, identifying multiple departments using the same vendor reveals an opportunity to leverage collective spending power. Discovering unexpected expenses in a category might lead to consolidating suppliers or collaborating with purchasing groups for more savings. In essence, spend visibility is the key that opens the door to a strategic, data-driven procurement approach, fostering not just cost savings but comprehensive alignment with the company's overarching vision.
The right spend data should empower your team to identify both risk and opportunity, helping you to:
Organizing spend data can be a complex and time-consuming task. Without a clear view, you may miss out on savings opportunities and delay strategic decisions that could give your company a competitive edge.
"What we do is take that messy data, clean it up, categorize it, and then assess it against our contract portfolio to find areas where we can streamline solutions and drive savings," explains Ashley Greuel, Senior Director of Strategic Alliances at OMNIA Partners.
OMNIA Partners helps by analyzing your spend cubes and uncovering savings opportunities. Then, you can come full circle with the team and leverage our group purchasing contracts for better terms and conditions.
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Free Spend Visibility Guide! Discover how to build a more resilient supply chain by optimizing your data and leveraging a group purchasing organization (GPO) |