Analysing maverick spend between multiple procurement organisations.
The bain of procurement spend analysis is trying to analyse items which have been given different descriptions by end users. Now imagine having to do this across multiple organisations at the same time!
This is the challenge faced by Purchasing Index when benchmarking prices of items between its various clients.
“One of the biggest challenges in our business is to correctly match items from the catalogues of our different customers.” says Alan Low from Purchasing Index. Each customer has different catalogue codes and different catalogue descriptions and as each new customer subscribes to our service, tens of thousands of catalogue items must be matched with items from all our other customers.”
“We’ve recently started making use of CCI-GrowthCon‘s spend analysis software to adress this challenge. We use their Description Based Analysis functionality (indicated in the graph at the start of the article) used for matching and grouping items within and between organisations,” he says.
According to Marc Silberbauer of CCI-Growthcon the description based analysis software compares each item description with all other item descriptions and groups similar items together.
“In this instance the software was setup to only group very similar items together where there was a high degree of confidence that all items in the group are actually the same thing. The groups have been prioritised according to how many Purchasing Index clients are represented and which items are not already benchmarked by Purchasing index,” Marc says.
“The software can also be used to identify “Maverick Spend” or increase spend with BEE suppliers by showing what has been purchased from a non-BEE supplier that could have been purchased from an existing BEE supplier.”
“We are now able to quickly identify those items that a new customer buys that have already been benchmarked as well identify new benchmarking opportunities that exist across our current client base” saysAlan Low.
Marc Silberbauer can be reached on 083 412 9493 or firstname.lastname@example.org