A successful sourcing program hinges on the ability of an enterprise to thoroughly understand its spend. Getting spend analysis right is a mandatory step toward actual cost reduction, continual process improvement and value creation.
Spend analysis services from GEP help leading companies across the globe identify — and realize — multimillion-dollar savings opportunities previously unknown to them.
Our spend analysis consultants are motivated by the same goals and measure success just as you do — through actual realized savings.
The University of Michigan is a large, decentralized organization serving multiple missions — teaching, research, patient care and public service. GEP is helping Michigan be successful by diagnosing our spending patterns and working with us to develop new business processes and practices that will save millions of dollars that can be channeled back to our core missions.
– Sr. Finance Lead, University of Michigan
Experience, Expertise, Technological Capability
GEP's industry-leading spend analysis consulting teams are made up of highly driven category and commodity experts with an extensive range of capabilities. Apart from being seasoned professionals and veterans of top-level engagements, our consultants are thoroughly fluent with cutting-edge spend analysis technology and are prepared to go the extra mile to deliver success. That means not just making recommendations and wishing you luck — our teams turn strategy into action and convert your targets into actual results.
Thorough, Detailed Spend Analysis
Spend analysis requires strong attention to detail. Our spend analysis solutions are thorough, comprehensive and broad in scope. We collate spend data from several systems and organize it to derive actionable insight on enterprise purchase activity. We deploy highly advanced, fully tested AI-based spend analysis tools to attain an impressive classification accuracy of 95 percent. This sets the stage for correct development and execution of strategic sourcing plans — a key factor in procurement’s effectiveness.
What can GEP’s spend analysis outsourcing services do for your enterprise?
- Aggregate, normalize and enrich spend data
- Bring more spend under management
- Improve contract compliance
- Compare attributes across suppliers and commodities
- Understand all fixed and variable cost drivers to develop robust sourcing strategies
- Boost cost savings from strategic sourcing initiatives
- Reduce sourcing cycle times
- Tap into the expertise of highly qualified consultants from leading markets worldwide
Understanding Spend Taxonomy
Spend taxonomy is the classification of enterprise sourcing or spend groups ordered by categorical hierarchy, ranging from general to specific based on spend complexity. The ranges usually include four levels with level one being the “Group,” two being “Family,” three being “Category,” and four being “Commodity.” The last level — commodities — is made up of a unique set of suppliers with similar core competencies.
Taxonomies are essential elements of data processing (cleansing, classification and enriching), in which line items are represented in the specified taxonomy. The absence of a robust taxonomy weakens classification, negatively impacting the quality of insight derived from spend analysis.
The United Nations Standard Products and Services Code (UNSPSC) is a four- or five-level coded classification system that enables buyers and sellers to describe goods and services in a common manner without the need to refer to supplier-specified codes and descriptions.
Building a strong, reliable taxonomy for your enterprise can get you the spend insights you need. Here are some recommended steps as you embark upon this process:
- Establish the output you expect from your reporting efforts
- Incorporate successful existing report classifications and weed out ones that underperform
- Take current as well as future requirements into consideration
- Try to find just the right amount of “detail”
Talk to us today for help with building the right spend taxonomy for your business.
Spend Analysis Outsourcing – Why GEP?
Unlike most other spend management providers, GEP gives its customers much more than nicely wrapped and presented spend analysis reports.
Our solutions generate real value with purchase data visibility that enables new, enterprise-level strategic input for procurement. We go well beyond insight and place our emphasis on helping procurement outsourcing clients become best-in-class.