The intersection of technology and finance is becoming increasingly packed with people, and they're not all accountants, data analysts, and IT-savvy Wall Street brokers. With the advent of virtual wallets, central banks breaking into blockchain technology, paper-free deposit systems at major financial institutions, and social media-based banking, corporate spend analysis is almost at risk of being neglected.
This lack of innovation and insight in the corporate world is severely hindering business process improvements across a range of industries. To help combat the fact that only a small percentage of organizations use automated spend analytic systems, certain procurement management applications now offer users the ability to design customized reports, access real-time information on spending activity, and connect invoices to an Accounts Payable feature for accurate spend visibility. All that's missing is a subdermal microchip implant for your CPO to monitor company spending during the two hours she's snorkeling off the coast of the Cayman Islands.
So with all the available technology in 2017, why are there still lingering obstacles to optimal spend visibility? There's a few reasons, take note:
- Data must be collected from multiple information systems and sources such as Accounts Payable (AP), General Ledger (GL), etc. This can result in a complicated and a lengthy process when attempting to retrieve information.
- Spend data may be inaccurate and/or incomplete due to a lack of organization and access to information.
- Orders are made without a proper system for approval, which contributes to maverick spending (purchases that "break the rules" of corporate spending procedures).
- A company may not want to challenge the status quo and move away from basic spreadsheet applications and manual reviews to aggregate and analyze spending data.
The advantages of implementing tactics for spend analysis can be witnessed immediately: savings (the most obvious), heightened process efficiency, greater control over maverick spending, and the ability to benchmark your corporate position relative to the competition. The list goes on: employees are able to be more productive, it becomes easier to identify the highest value suppliers per spend category, and monitoring item prices & budgeting is made effortless. All of these points make a strong argument for increased data analysis in procurement. Next time you find yourself crossing the road between technology and spending data, let yourself get hit (by insight).