3. Spend Analytics
Pitfalls, Pain and Promise
• Contemplating spend analysis as a next step in your
procure to pay journey?
• Where does unstructured data from credit card and
travel come into play?
• Juggling multiple ERP systems or a big financial
system upgrade?
• All of these real world challenges will be discussed.
We will highlight key concepts, data standardization
practices, and how one institution found solutions
with Spend Radar; combining data from two ERP
systems, a travel and expense management tool,
credit cards and eProcurement that resulted in
actionable insights into their spend.
4. Spend Analytics
KEY CONCEPTS
What is spend analytics?
• Process of aggregating, classifying, and
leveraging spend data for the purpose of
reducing costs, improving operational
performance and ensuring compliance.
The importance of spend analytics
• Spend data insight is critical for identifying
savings opportunities and developing
sourcing and planning strategies.
• Drives purchasing compliance with
negotiated contracts and identifies missed
opportunities.
• Pressures to extend the value of existing
sourcing, procurement and ERP technology
investments.
5.
6. Spend Analytics Pitfalls
Getting started…
• Where is our data?
• What data is important?
• Do we have a commodity standard?
• How are we getting the data?
• What is our process for analysis and
standardization?
• How are purchasing and sourcing staff
going to interact with the data?
• What the process to do it again?
7. Streamline potential with a
spend analytics tool
Spend Analytics Pitfalls
• Validate spend totals
of each data set with
client as a gut check
to ensure all spend
data has been
captured
Consolidate
Available Data Normalize
Vendor Names
Spend
Analysis
& Associated
Output
Categorize Clean
Vendor Names
• One of the most
common obstacles to
successful vendor
level spend analysis
is the redundancy /
variability of supplier
names
• Goal: Categorize
80%-90% of total
spend
• Focus on high-spend
and high-volume
vendors
• Highlight supplier
consolidation
potential
• Additional analysis
on transactional data
may be required for
select categories
Step 1
Two Weeks +
Step 2
≈5-10 hours
Step 3
≈10-20 hours
Step 4
≈10-20 hours
Employing a spend analytics tool to normalize and categorize data could potentially
reduce the Sourcing Team’s effort on spend analyses by 50%-75%.
AP PCardOther
8. Spend Analysis Pain
Growing pains
• Our data is spread across our legacy
ERP, new ERP and eProcurement
solution
• Credit Card for purchases and travel is
somewhere else
• We care about Employee
reimbursements, but its buried in AP
voucher data
• We have goods under control, but
service and travel need attention
• How do my purchasing staff start using
the tool more broadly?
9. Spend Analytics Promise
Keep focused
• Data is automated and comprehensive
• Unified category structure for all spend
• Mapping of unstructured data covers
card, travel and reimbursements
• Spend data, supplier diversity, Key
Performance Indicators and contract
compliance are available
• Non-traditional areas are next –
supplier enrichment, savings and
benefit reporting, KPI, benchmarking
and year-to-year comparisons
10. ERP
GL, PO/Invoice, T&E,
Vendor Master
eProcurement
POs, Product Catalog,
Contracts
External Systems
P-Cards,
DATA SOURCES
Analyze /
Report
Extract spend
data from internal
& external
sources
Validate data to
ensure accuracy
& completeness
Cleanse data to
eliminate errors
& discrepancies
Classify data with
standard schema
Enhance/Enrich
data with related
business
information
Analyze spend
data with
advanced
analytics and
reporting
Validate Cleanse Classify
Enhance /
Enrich
Extract
IMPLEMENTATION
Strategic
Sourcing
Spend Volume
Aggregation
Supplier
Rationalization
Compliance
Management
OUTPUTS
Spend Analytics Framework
11. Implementing Spend Radar
Adopt
• People
• Training
• Monitoring
Validate
• Data
• Reports
• Dashboard
Build
• Data specs
• Mapping
logic
• Confirm
rules
• Review UI
• Test files
Design
• Data Scope
• Extract
Process
• Mapping
• Normalize
• Logic &
Rules
• Dashboard
Experience
Plan
• People
• Process
• Data
• KPIs
• Define
Spend
• Taxonomy
1 Month 3 - 4 Months Ongoing
12. Mapping & Translation
OLD DATA
GL Details
Invoice Details
Spend Radar
Extract Process
Validate
Cleanse Classify
Apply Logic & Rules
Analyze / Report
13. Mapping & Translation
NEW DATA
GL Details
Invoice Details
GL Details
OLD DATA
Invoice Details
Spend Radar
Extract Process
Validate
Cleanse Classify
Apply Logic & Rules
Analyze / Report
PO Details
Credit Card Details
Contracts
18. Huron provides services to a wide variety of organizations,
including leading academic institutions, healthcare organizations,
Fortune 500 companies, medium-sized businesses, and law firms.
About Huron Consulting Group
Huron Consulting Group
History
• Formed in March, 2002 by
experienced financial and operational
consultants, including CEO and
President Jim Roth
• Over 2,800 consultants company-
wide
• Approximately 50% of resources in
Health & Education consulting
• Over 11,000 engagements at over
4,100 higher education, government,
and commercial clients
Value Proposition
• Focused and integrated financial and
operational consulting
• Implementation and service provider
• Over 50+ SciQuest implementations
• Independence and objectivity
