Gartner Research

Spend Analysis Best Practices

Published: 02 September 2011

ID: G00216408

Analyst(s): Deborah Wilson

Summary

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

Analysis

  • 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

Recommended Reading

©2019 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.

Already have a Gartner Account?

Become a client

Learn how to access this content as a Gartner client.