Inspired by a famous song from a lesser-known four-piece band from Liverpool, I hope this will be a more upbeat look into my work as the Senior Data Analyst at Ebit Intelligent Procurement.
Briefly, my role at Ebit revolves around helping both the company and our clients make informed decisions around procurement and projects based on the data available. This could involve analysing accounts payable (AP) or compliance data for clients, as well as handling internal tasks such as performance reporting, planning, tender responses, RFPs, or even system testing.
For the purposes of this article, I’ll focus on one key type of analysis I frequently conduct for both new and existing clients: spend analysis. I will also dive into the analysis of contract compliance which is also a regular feature of my work.
Spend Analysis
Essentially, this analysis categorises client spend into Ebit’s taxonomy, enabling our consultants to dissect the data and spot potential cost-saving opportunities. It’s often one of the first tasks we complete when we on board a new client. The process follows 3 steps before it is handed back as a complete data set;
Supplier Matching
We start by matching the client’s suppliers with our Ebit taxonomy. Over time, we’ve built an extensive database of suppliers we’ve worked with or researched before. For those not already in our database, I investigate the company and categorise their services into the relevant category or sub-category. This information is then added to the database for future use, helping streamline future analyses.
Dashboard Creation:
Once the suppliers are categorised, I create a dashboard that consolidates all available data. At first, this dashboard provides a high-level overview, covering key metrics such as spend and the number of suppliers in each category. As we gather more data over time, the dashboard evolves to reflect changes and trends in the client’s spending patterns.
Tail Spend Classification:
Another important aspect of the analysis is classifying the “tail spend.” I apply the Pareto principle here, identifying the 20% of spending that accounts for around 80% of the suppliers. This segmentation is also incorporated into the dashboard to give consultants a more detailed understanding of client spend.
Once these two elements (supplier matching and tail spend classification) are integrated, the initial spend analysis is complete. Sounds simple! There is a lot of research as well as data manipulation and comparison involved.
The findings are then shared with the consulting team, who use their category expertise to identify opportunities for cost savings or process improvements. The data is then shared with clients, often using bespoke dashboards to draw out pertinent points and highlight opportunities and risks.
Contract Compliance
I also help our clients by analysing their Contract Compliance. This is a key requirement for businesses as good compliance ensures that suppliers adhere to legal, ethical and operational standards, as well as meeting their contractual requirements and expectations. Failure to comply with legislation and standards can result in significant risks and consequences such as supply chain disruptions, legal and regulatory fines, reputational damage and increased costs.
If our clients are spending money without a contract in place means they don’t have the visibility, control or influence over their suppliers. This area of additional risk can be identified and managed, which is fundamental to the operation of good business.
Benefits of Contract Compliance
Reduced risk: Ensuring compliance will reduce the risk across supply chain. By monitoring and enforcing compliance, you can identify and address potential issues before they become major problems
Improved quality and performance: Contract compliance will help to improve the quality and performance of the supplier by ensuring they meet agreed-upon standards for quality, delivery and pricing
Increased transparency: Good compliance will increase transparency by providing visibility into supplier practices, performance and compliance with regulations and standards. This will help build trust and improve relationships
Ethical and sustainable sourcing: Ensuring compliance can help to promote ethical and sustainable procurement
Cost savings: Compliance will help reduce costs by reducing contractual increases, fixing prices, identifying inefficiencies and having timely reviews upon renewal. Reducing auto-renewal without review
Audit Readiness: Detailed records and transparent processes enhance readiness for both internal and external audits. Auditors can easily verify that all rebate and penalty transactions are accurately recorded and compliant with contractual and regulatory requirements.
By analysing these data sets our team of experienced consultants and Subject Matter Experts are able to bring to life a picture of procurement for our clients.
