Gartner Research

Spend Analysis Best Practices

Published: 02 September 2011

ID: G00216408

Analyst(s): Deborah Wilson


Gartner explains how spend analysis solutions work, and answers users' top questions on how to get the most from this foundational technology.

Table Of Contents
  • Overview


  • Spend Analysis as a Top Procurement Process
  • Common Spend Analysis Questions and Answers
    • What is a spend analysis solution?
    • Can you use reports from a transaction system, like an e-procurement application, for spend analysis?
    • What exactly does a spend analysis solution enrich and clean up?
    • Are duplicate supplier records a big deal?
    • How do spend analysis vendors match duplicate supplier records?
    • Is it important to identify suppliers that have a common parent company or shareholder?
    • What is category-level classification, and why is it important?
    • How do spend analysis vendors classify spending by category?
    • How accurate is a first-pass spending classification?
    • Does the choice of classification schema impact the vendor's ability to classify spending?
    • What else impacts category-level spending classification rates?
    • What can an organization with poor data do improve category-level classification?
    • Can't you just ask employees to input a class code in their requisitions?
    • What happens when procurement finds a classification mistake in the output after the spend analysis is done?
    • What is part-level spend analysis, and why is it important?
    • What's involved in getting transaction data out to the spend analysis vendor?
    • From how many source systems do buyers usually pull data?
    • Are spend analysis vendor data models flexible?
    • How long does it take to refresh a spend analysis, and what is the best practice on how often to refresh?
    • Can spend analysis vendors handle multilanguage transaction data?
    • Why do some vendors offer a trial spending classification, while others do not?
  • Bottom Line

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