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Spend Analysis Technology A Must For Procurement, Says CPO

By  Lance Mercereau  on  12 Oct 2015

Spend analytics is a requirement for today’s procurement professionals, rather than an optional extra according to a CPO.

Simon Boggis, chief procurement officer at CEVA Logistics, said the technology had revealed new sources of value for the global company.

“Spend analytics is not just an option, it is a necessity – you need to have good quality data. And for us it has proven to bring more commercial value when in one place, rather than fragmented across several systems,” he told the CIPS Annual Conference in London.

“We as a profession have to drive continuous innovation, we need to bring high performance and we need to improve our productivity for the organisation. This is a solution that for us, and many people, can be a catalyst to drive superior value.”

Boggis admitted he knew when he implemented the technology that “I would be opening Pandora’s box, because as much as I could find these opportunities, I knew I could be beaten up with them.”

He cited the example of a global deal in place with a stationery supplier, only to find that in North America the company was also using 15 other vendors.

He added: “But we thought we had to take that next step, find out what we are spending, before we start all these extravagant sourcing programmes, let’s be more efficient in the way we are buying.”

And there have been big benefits. Aligning 7,000 vendors to standard payment terms based on analysis generated $40 million in working capital for the business.

“This was an area we had never been able to get under the skin of, because we had asked our local countries if there was an opportunity to improve working capital and they said we had exhausted everything. But with central visibility we could see the data.”

Paul Cook, vice president of global sales at Rosslyn Analytics, said data is now more valuable than oil. “But in its crude format oil is worthless, it doesn’t have a value until it is refined, until somebody has taken it and done something with it. It is exactly the same with data.”

Coverage from: Supply Management