Back to Glossary

What is Spend Analysis?

Spend analysis involves studying and analyzing enterprise-wide expense data to identify opportunities that can help in maximizing the value in a category. The steps involved in spend analysis include collecting, cleansing, classifying and analyzing spend data with the motive of reducing procurement costs, boosting efficiency and monitoring compliance.

Spend analysis pinpoints the reasons behind the spending and works on ways to minimize them effectively. Spend analysis aims at enhancing business efficiency by reducing costs wherever possible. And this can be achieved by bringing in specific improvements.

Procurement expenditures can affect business revenue figures. However, spend analysis churns out actionable data for companies to polish the existing procurement processes and optimize to cut expenses.

Benefits of Spend Analysis

Enhanced Data Quality

Spend analysis involves collecting, cleaning, optimizing, and enriching the purchase data. In addition, multiple filters enhance the quality of available data.

Increased Savings

Spend analysis reveals the underlying information about expenses, trends, and performance against the benchmarks. This enables enterprises to reduce procurement costs and realize higher savings.

Streamlined Operations

Spending reviews give an accurate picture of what’s happening on the ground. It furthermore assists companies in figuring out how to streamline business functions to plug the financial leakage.

Controlled Risks

Any unnoticed expenses can derail an enterprise’s accounting and impact business efficiency. With automated spend analysis, organizations can categorize spending and monitor costs. It also helps control any unwanted risks associated with them.

Benchmarking Opportunities

With preset expenditure classifications, organizations can form and use benchmarks to improve performance.


Spend analysis helps enterprises understand what they really spend on, who’s doing the spending and where. And most importantly, it helps enterprises understand if they are getting their money’s worth.

Explore this case study as an example how spend analysis helps enterprises realize cost savings - How a Fortune 500 Retailer Saved 10% Costs on Key Spend Categories by Partnering With GEP.

World's Leading, Unified Source-to-Pay Platform for Direct and Indirect Spend Management

GEP SMART is an AI-powered, cloud-native source-to-pay platform for direct and indirect procurement. GEP SMART offers comprehensive source-to-pay functionality in one user-friendly platform, inclusive of spend analysis, sourcing, contract management, supplier management, procure-to-pay, savings project management and savings tracking, invoicing and other related functionalities.

Learn More ‌ 

Next-Gen, End-to-End Supply Chain Management Platform for the Connected Enterprise 

GEP NEXXE is a unified and comprehensive supply chain platform that provides end-to-end planning, visibility, execution and collaboration capabilities for today’s complex, global supply chains. Built on a foundation of data, artificial intelligence and cognitive technologies, GEP NEXXE helps enterprises digitally transform their supply chains and turn them into a competitive advantage.

Learn More ‌