Spend Analysis: The Window into Strategic Sourcing

A growing number of senior executives are coming to realize that strategic supply management can be a significant driver of improved corporate performance and better risk management. Spend analysis is the most critical component, and the starting point, of strategic supply management and is essential to achieving world-class performance. If you can’t analyze your spend data, many opportunities for improvement beyond the low hanging fruit are without doubt being missed. One of the foundation blocks for transforming an organization’s practices to world-class supply management is the business process called strategic sourcing. And one of the requirements for enabling world-class strategic sourcing results is rigorous spend analysis.

There is a lot of confusion on what constitutes spend analysis and what benefits can it provide. Spend analysis can help improve several areas: the identification of cost reduction opportunities, the prioritization of sourcing projects, the negotiated results, and the tracking and monitoring to ensure that negotiated results reach the bottom-line. It can also play an important role in improving compliance with Sarbanes-Oxley. However, implementations are complex and involve many departments within an organization. If the implementations are done correctly, they can yield high ROI. If not, they can consume money and deliver no returns due to lack of adoption.

Spend Analysis: The Window into Strategic Sourcing is the definitive text on this important subject, written by leaders in the field. It is currently the only reference that provides in-depth guidance on what spend analysis really is, what it involves specifically and how to use it in your journey to world-class performance. It provides both an executive overview and technical details for practitioners. Readers do not need specialized knowledge in database systems, information technology or any other field to gain insights from reading this book. It is a must read for procurement, supply chain management, operations, and finance executives, and for practitioners and consultants.

Kirit Pandit is Vice President of Content Strategy and Head of Product Management for the Spend Analysis and Compliance Solution of Emptoris, Inc. He has over a dozen years experience working to design and elicit value from procurement processes to enable better spend visibility and savings opportunity analysis. Kirit joined Emptoris in early 2005 when Emptoris acquired Intigma where he was CEO and co-founder. Kirit founded Intigma in 2000 with a single vision - to automate the conversion of toxic ERP content sources into valuable repositories of structured information that enable all decision support systems including Supplier Relationship Management (SRM). In 2004, Intigma was providing Spend Data Management services to 4 of the top 6 Spend Analysis providers. In addition to holding the CEO office, Kirit played important roles in product management, key customer and channel relationships, and governance and financing efforts. Prior to starting Intigma, Kirit spent four years in Deloitte Consulting as a Manager, where he consulted with F-500 companies and implemented Supply Chain Optimization and eProcurement solutions. Prior to Deloitte, Kirit spend 6 years in National Instruments as a Dir. Design Engineer, where he developed cutting edge products for the test and measurement industry. He is credited with designing the smallest data acquisition PC card for the T&M industry in 1995. Kirit has published numerous papers in scientific and business journals and is a sought-after speaker at investor and industry forums. In 2006, he was given the 'Pro to Know' award by Supply and Demand Chain Magazine. Kirit holds a B.S. in Electrical Engineering from the Indian Institute of Technology, Bombay, an M.S in Electrical Engineering, as well as M.B.A. from the University of Texas, Austin. Dr. Haralambos Marmanis is Director of Research, and chief architect of Emptoris' Spend Analysis and Compliance Applications. He has worked on the design and implementation of: network protocols; cardiovascular flow simulations; Micro-Electro Mechanical Systems (MEMS); trading applications; electronic marketplaces; supply management, and spend analysis. For the last 7 years, Dr. Marmanis' work has been related to the application of machine learning and data mining techniques in the analysis of transactions for the purpose of identifying spending risks, savings opportunities, vendor consolidation, state and federal compliance, and contract optimization. Emptoris was, in 2004, the recipient of the INFORMS Franz Edelman award; Dr. Marmanis received also the Sigma Xi Outstanding Research Award, and his work was on the cover page of "Visualization '99" and the Centennial volume of IEEE. His work has been supported by the National Science Foundation. He holds a Ph.D. degree in Applied Mathematics from Brown University, a M.Sc. degree in Theoretical and Applied Mechanics from the University of Illinois at Urbana-Champaign, a B.Sc. and a M.Sc. degree in Civil Engineering from the Aristotle University of Thessalonica. Dr. Marmanis is the author of numerous publications in peer reviewed international scientific journals, conferences, as well as technical periodicals.