How to write a business case for transformative spend analytics
January 20, 2022
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5 min read
To get complete buy-in from your leaders, and optimal return on your investment, it helps to explain to them the benefits of spend analytics and how it works.
This guide will teach you how to use your spend data to transform your business for profitable growth.
Download our free Low Risk Low Value (LVLR® ) framework to get complete spend visibility and achieve over 20% reduction in costs.
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Next you need to identify your key stakeholders. Your primary audience should be chief financial officers (CFOs), chief procurement officers (CPOs), chief operating officers (COO), and other senior professionals who will be looking for transformation opportunities to improve efficiency in the supply chain
Explain the value of spend analytics to your business stakeholders.
It is important to highlight how transparency of the data can be used to control internal maverick spending, bring spend under management and improve supplier performance.
You need to explain how full spend visibility allows you to identify where established purchasing rules have been misunderstood, overlooked for expediency, or in hopefully less frequent cases, deliberately ignored to commit fraud, for purchases of indirect goods and services.
In the same way you need to describe how the automated, aggregated view of your organisations spend provides a solid foundation of information for decision making. These in-depth insights, produced by the intelligent spend analytics process, will help your business to target the key categories of spend which are non-compliant and require professional procurement intervention to bring the spend under contract. They also allow for the business to profile its suppliers and service providers according to levels of value, risk, and potential opportunity for savings.
It is important to highlight to your stakeholders how, intelligent spend analytics actionable insights, are able to protect and enhance your organisation with improved profitability (bottom-line savings), supplier management, contract compliance and risk management.
The next emphasis of your business case should be to explain how intelligent spend analytics can be influential in driving positive changes to purchasing practices throughout all departments, business units, functions, and countries. For example, by monitoring the number of transactions made without purchase orders, additional training on correct procedure and approval processes can be provided to avoid such “out-of-policy” spending. Further, providing key stakeholders with budget responsibility, visibility of how money is being spent in their name, encourages them to take accountability and their help may be enlisted to drive the change needed to ensure that spend is more effectively managed, budgets controlled, money saved, and contract / procedural compliance met. By changing the buying behaviours of your organisation, you can reduce the risks of non-compliant purchases, which in turn protects your organisation from reputational damage or financial harm of being associated with unfamiliar (unvetted), or unreliable suppliers.
The final part of your business case should focus on how investing in spend analytics will enable your organisation to make a rapid return on investment (ROI) and turn “data into profits”. A tool like Spendkey, helps mid-to-large, or complex, or acquisitive businesses by providing a rapid expenditure repair kit that improves profits within days for 10X ROI.
Whether you’re pitching to the CEO, chief finance officer, chief operating officer, chief procurement officer or you are managing a procurement team, intelligent spend analysis is a key part of removing unnecessary expenditure, driving greater value, improving supplier performance, increasing compliance & controls, changing cultural behaviors and buying patterns, so that ongoing spending and costs are better aligned to strategic (internal & external), environmental, and operational goals.
However the basics of your case are simple:
An AI, cloud-based machine learning, spend analytics solution such as Spendkey gets you there
So make your case today! There is no need to continue estimating and guessing – Spendkey can tell you how your organisation is spending 100% of its expenditure and provide actionable insights to help you make informed decisions.
With traditional cost-cutting measures failing to drive business growth, finance leaders are discovering a new approach to cost control and growth — one that is focused on data-driven decision-making and continuous improvement.
With Spend Analytics, finance leaders can achieve greater accuracy in their budgeting and forecasting processes, which can lead to improved financial performance for their organisations.
In today's uncertain economic environment, Spend Analytics emerges as a transformative solution for finance leaders to meet the imperative of driving business growth.
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