Tag: Spend analysis

marketing analytics

Spend analytics solutions helped a manufacturing company to identify spend patterns and increase profitability by 12%

The client is a leading manufacturer and distributor of high-quality construction equipment based out of Germany. The company is well-known for delivering high-quality construction equipment and services in more than 14 countries.

In today’s complex business scenario, gaining a 360-degree view of the spend may seem like an uphill task, even for well-established companies. The client, a multinational conglomerate in the industrial and manufacturing sector, was no exception. With business units spread across Europe, the client faced several spend management issues that left a measurable impact on their business operations.

Quantzig’s spend analysis solutions can be custom configured to your organization’s existing processes and spend management system’s subtleties to help you deliver sustainable results. Request a FREE proposal to gain in-depth insights into our portfolio of spend analytics solutions.

Business Challenge

Global manufacturing companies face a wide range of challenges including the need to adhere to local regulations related to labeling requirements and safety standards. Such factors are pressurizing manufacturing companies to adhere to the regulatory requirements without compromising on their operational efficiency. Spend data, data systems, and domain knowledge are often siloed within specific groups of teams in manufacturing companies. Therefore, leveraging spend analytics solutions has become important for companies to address such challenges.

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The client, a German manufacturing company, was struggling to gain a consistent and unified view of spend throughout different functional groups within their organization. With minimal access to vendor information and a mere 6% of the organization’s spend data categorized, the client was experiencing a steady decline in their negotiation power. By leveraging spend analytics solutions, the manufacturing company was looking to overcome such challenges caused by data silos and operational complexities. As a result, they approached Quantzig to gain greater visibility into their spend patterns and improve profitability.

Our spend analytics experts can help you achieve notable improvements in supplier performance, and efficiency. Get in touch with them right away!

Solution Offered and Value Delivered

The spend analytics experts at Quantzig adopted a comprehensive approach to understand the core business challenges faced by the client. The initial phase of the engagement revolved around analyzing the client’s existing spend data and patterns. By gaining valuable insights from such analysis, the experts then unlocked the potential value in the growing spend data of the client which further helped them to identify roadblocks to spend management. Also, the solution offered by Quantzig enabled the manufacturing company to integrate spend and supplier data and eliminate bottlenecks by leveraging real-time spend insights.  As a result, the client realized an increase of 12% in their profitability and identified several saving opportunities which were previously unknown to them.

Quantzig’s spend analysis solutions encompass the entire value chain, with each offering uniquely configured to meet distinct client requirements. Request a FREE demo below to know more.

Spend analytics solutions also helped the client to:

  • Proactively address compliance related issues
  • Achieve notable improvements in supplier performance
  • Streamline their procure-to-pay operations

Why choose Quantzig as your next analytics partner?

Quantzig’s spend analytics solutions provide companies with opportunities for procurement that help them to achieve wider business objectives. An in-depth spend-analysis solution by Quantzig helps leading organizations to rationalize their supply base, deliver unit cost savings from unmanaged spend, reduce maverick spend, and harmonize pricing across buying centers. At Quantzig, we bring together scalable advanced technology and analytics experts to deliver accurate results that give sourcing and category teams confidence in the spend data, so they can focus on delivering value.

To learn more about how our spend analytics solutions can help you tackle supply chain risks and drive continuous innovation and improvement, request for more information now.

To know more about spend analytics, take a look at our holistic guide to spend analytics here:

A Definitive Guide to Spend Analytics

marketing analytics

A Definitive Guide to Spend Analytics

What is spend analytics?

Spend analytics is the process of identifying, collecting, categorizing and analyzing the spend data of an organization. The goal of spend analytics is to decrease procurement costs and improve efficiencies. Spend analytics help businesses to gain clear visibility and dive deeper into spend data to understand the spending patterns and the supply base, to track the matrices of procurement performance, and to gain actionable insights for spend consolidation to reduce the procurement cost. Also, spend analytics solutions can aid businesses in identifying cost arbitrages, benchmarking internal performances and improving delivery performance.

Identifying opportunities for consolidation of spend and reduce procurement costs is a daunting task for businesses. But we are here to help. Get in touch with our experts now!

Why is spend analytics important?

In today’s complex business environment where leading players are leaving no stone unturned in the quest for cost reduction, spend analytics is considered to be the best way to optimize spend.

Following are the reasons why spend analytics is important for businesses today:

  • Spend analytics can be helpful for gaining visibility on spend data and suppliers
  • Spend analytics has the ability to streamline procurement processes
  • Spend analytics can help in better risk and spend management
  • Spend analytics can help significantly in category level analysis.
  • Spend analytics can be helpful in building an effective relationship with suppliers
  • It can help manage the tail spend in a much better way

How can you control your spend with spend analytics?

Costs are skyrocketing in many industries but that does not imply that companies should raise rates to keep up with current levels of profit. The consistent growth of any business is, of course, important but there is more that can be done on the operational side to keep your profits increasing despite growing industry costs. The formula to succeed here is optimizing the process to contain costs throughout the supply chain. Also, companies can leverage spend analytics to gain spend data visibility across the departments and various business locations. This visibility can help businesses make significant improvements to the bottom line without putting more efforts into customer acquisition. Furthermore, spend analytics helps companies to gain visibility into how their spending impacts business operations.

Here is a list of various ways in which spend analytics solutions can help in controlling costs:

Find potential savings

Spend analytics helps in identifying the specific areas of spend in business and segment the procurement spend data to decrease costs and boost efficiency. This can further help in analyzing the sources that provide the best savings opportunities. Also, such data can be used to negotiate cost savings with suppliers.

Quantzig’s spend management solutions can help businesses in streamlining their procure-to-pay operations. Want to know how? Request a FREE proposal now.

Understand aggregate spend

With the help of spend analytics solutions, companies can gain an understanding of how their spend affects the overall performance of the business. Furthermore, this data can assist in strategic planning and can increase visibility into supply chain operations. The increased visibility allows businesses to gain useful insights into their current procurement processes and then streamline their operations.

Evaluate supplier performance

By leveraging spend analytics solutions, businesses can evaluate their supply chain and can identify dependencies, risks and quality issues in the overall supply chain network. Also, through spend analysis services businesses can identify and rank key performance indicators (KPIs) that are most important to their organizations, and then use this as measurement against their supply chain to determine the performance of the suppliers. Consequently, this can lead to better supplier performance management.

Request a FREE demo below to know how our customized spend analytics dashboards can help you reduce maverick expenditures and capitalize on new opportunities.

Challenges businesses face while implementing spend analytics

Lack of understanding

Spend data is usually incomplete, not updated, or isn’t accurate to make strategic decisions based on it. Companies need to understand that they need to collect accurate data for better decision making. Also, they need to classify and segregate the spend data through automated programs to avoid manual errors.

Lack of resources

Traditional spend analysis systems were developed to provide local opportunities and simple strategic programs. Such systems were not able to deal with complex data sources. So, companies need to leverage spend analytics solutions today to understand and analyze complex data sets and institute intelligent spend management strategies to reduce maverick spend.

Lack of capabilities

Companies tend to miss opportunities for savings due to the lack of capabilities to gain 360-degree visibility into their supply chain networks. But by leveraging spend analytics solutions, companies can have better data visualization and can implement the best practices to streamline sourcing and procurement processes.

Manual classification of data

Companies across industries face challenges in data classification. Datasets for each and every company is stored and structured differently. Manually classifying data can be subjective as well as inconsistent. Also, manual data classification is a complex and expensive task for businesses. Businesses following the manual process of data classification tend to miss essential information stored in unstructured data sets. As a result, businesses can leave their most critical assets vulnerable based on incorrect information. 

Want to know more about challenges in spend analytics implementation? Request for more information below.

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Three Reasons Why Spend Analytics is Important from a Business Perspective

There is a wide variety of procurement technology available today that helps businesses to manage different aspects of procurement processes including strategic sourcing and purchase-to-pay processes. Such technologies help in improving vendor management and contract management. Despite the availability of such solutions, many organizations struggle in managing their spend data and find it difficult to transform them into actionable insights.

Are you finding it difficult to identify opportunities for consolidation of spend and to reduce procurement costs? Get in touch with our experts now!

Why is Spend Analytics Important?

Reason #1: To overcome the challenge of data management

Spend data comes from multiple sources which include accounts payable systems, payment consolidators, and vendor data management systems. Therefore, it is crucial for businesses to identify sources of spend data resides is not a one-time process but an ongoing exercise. Also, enterprises are in constant flux due to mergers and divestitures. This makes it impossible for them to have all the data in one place. For proper spend data management, companies must leverage spend analytics solutions to understand and segregate the spend data into procurement-centric spend categories.

Our spend analytics solutions help companies to gain visibility, track procurement performance metrics and supply base. Request a FREE proposal now to gain more insights.

Reason #2: To deal with data visualization challenges

Spend analytics helps organizations in interpreting data and transforming it into useful information. Also, spend analytics solutions help in making spend data more productive both for sourcing and procurement professionals. Traditionally, enterprises use MS Excel to analyze data but relying on spreadsheets alone for spend analysis is a time-consuming process and requires a lot of resources in the long run. With customized spend analytics dashboards, businesses can visualize spend data and gain in-depth insights into factors affecting spend.

Request a FREE demo below to find out how our customized spend analytics dashboards can help you reduce maverick expenditure and capitalize on new opportunities.  

Reason #3:  For better spend data analysis

Availability of multiple procurement technology under one roof makes it difficult for enterprises to analyze spend data. Also, this limits their ability to leverage analytics outside the technology suite. But spend analytics solutions can help in spend data management while improving the workflow between sourcing and procurement process. Customized spend analytics dashboards aid in spend mapping by focusing on integrating modules and offering better data visualization capabilities. Therefore, spend analytics solutions offer purpose-driven experiences to companies across various business operations.

Want to know more about how customized analytics solutions can help you redesign your sourcing strategies and improve procurement efficiency? Request for more information below.

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spend analytics

A Beginner’s Guide to Spend Analytics

What is Spend Analytics?

Minimizing cost is the major cause of concern for many companies and this is the reason they spend more time in the process of spend management. Spend analytics can make this easier by optimizing the supply-side performance and consolidating the data from the supply chain. Spend analytics help companies to make data-driven decisions and identify better opportunities for savings by analyzing their spending patterns. Also, spend analytics can assist in examining the expenditure of an organization and offers significant visibility into the procurement spending of an organization. This can further help the organization to improve the supply chain operations and result in better returns.

Our spend analytics solution can help you in minimizing supply chain disruptions. Request a FREE proposal to learn more about our portfolio of services.

Benefits of Spend Analytics Solutions

spend analytics

Better visibility on suppliers and spending

By leveraging spend analytics solutions, any organization can yield valuable insights into its expenditure in real-time. This detailed information can be handy in improving the overall procurement process. Consequently,  organizations can adopt better practices for procurement that will be more helpful and efficient in managing the relationship with suppliers, improving supplier base and category management.

Spend analytics is the key to manage the tail spend of any organization. Request a FREE demo below to find out how it can help you unlock cost-saving opportunities.

Helps in the category level analysis

Spend analytics solution can help companies to analyze spend at the individual category level. This can assist in gaining visibility into the overall spending of the organization to control the cost-effectiveness. According to recent research results, organizations that leverage spend analytics develop a better relationship with preferred suppliers. Furthermore, spend analytics can help organizations to achieve bigger business objectives by making sourcing efficient and optimizing the supply base.

Assists in managing the risks

Working with the same suppliers for years can incur potential risks for organizations. A robust spend analytics solution can help organizations to innovate their supply chain and deliver new products and services to the customers. Also, by gaining actionable insights from analytics dashboards, companies can make capital improvements and deal with unforeseen challenges such as supply chain disruptions, cash-flow issues, and labour shortages. Spend analytics also provides an opportunity for procurement teams to contribute to wider business objectives and deliver unit cost savings and reduced maverick spend across buying centres.

Are you finding it difficult to improve your bottom-line due to inefficient spend management? Get in touch with our experts right away!

Quantzig’s Advantage

The fragmented, inaccurate, and unstructured data can lead to undesired outcomes for businesses and can charge heavily on their pockets. Quantzig’s spend analytics solution offers comprehensive category wise spend analysis based on commodities, suppliers, supplier locations, buying locations, business units, and cost centres. This helps businesses to enhance visibility into spending patterns for all indirect spend categories across an organization’s supply base. Our customized analytics dashboards deliver accurate results that instil confidence in sourcing and category teams regarding the spend data that can help them deliver value.

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Why Hasn’t Marketing Mix Modelling (MMM) Advanced Much Since its Introduction?

Marketing Mix Modelling (MMM) is transforming a classical adage that half of the advertising spends are being wasted, with the problem being the inability to identify which half. An enormous amount of data is being generatedGet in touch every year to assist marketing managers to make decisions on the optimum utilization of marketing budgets. By analyzing data on multiple marketing spends and its effect on sales, marketers can allocate budgets efficiently and devise an effective marketing strategy. Marketing mix modelling has been assisting marketing managers in formulating marketing plans with the help of valuable analytical tool to optimize the marketing mix to achieve increased sales value.

Since the time marketing mix modeling was first used during the early 90’s, it hasn’t advanced much regarding issues covered and underlying methods used. Here are some of the reason its growth has been hindered:

The Attribution Problem

Marketers are equipped with an arsenal of tools to improve their brand’s performance. These tools do not work in isolation, but rather the synergy between them is what causes a brand to succeed in the marketplace. Marketing professionals are always posed with the same problem. If there is an increase in sales or other metrics, which marketing or promotional tool should it be attributed to? Is the increase in sales caused by increased advertisement spend or a reduction in price? This can pose to be a roadblock during the resource allocation process. However, with the advent of digital technology, attribution models like first interaction, time decay, position based model, and backward looking last click attribution seeks to resolve this problem area.

How to Quantify this Information?

Insights obtained from marketing mix modelling depends heavily on the quality of input data. Abundant information can be captured with the increasing prominence of big data. One of the biggest challenges in this area is the measurement of unquantifiable information. Marketing indicators such as customer satisfaction, brand image, emotions, customer feedback, along with observational tools like eye tracking, video, physiological measurements, tracking, facial expressions analysis, and head movement cannot be expressed in terms of numbers. Marketing mix modelling does not consider such information unless it can be quantified.

The Case of Marketing Myopia

A brand is created by years of deliberate and skillful marketing efforts. Marketing professionals often attribute a brand’s success to short-term effects of media and marketing efforts. Recent marketing activities may increase brand value in the short run, but a brand’s real value is determined by its consistency, relevance, and distinction over the long run. Marketing mix modelling often struggles to adjust this long-term significance accurately.

Marketing experts have come up with various models to address these issues, offering a vast scope for improvement in marketing mix modelling. Digital marketing has also made contributions in this field by providing massive amount of data and acting as a field to test products and brands.

 

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Related Articles:

Spend analytics and supplier benchmarking saves USD 5 million for manufacturing company

Business Challenge: Improving supplier selection by supplier evaluation and spend analysis. A global manufacturing industry client wanted to conduct spend analysis, and evaluation of its suppliers to shortlist the most cost effective suppliers.

Situation: Understanding the global procurement spend for the manufacturing industry firm

The manufacturing industry client had a global network of suppliers and wanted to analyze the spend on suppliers and procurement, quantify supplier profitability, and develop a supplier selection scorecard to shortlist ideal purchasing partners.

Solution/Approach: Spend analysis, supplier evaluation and vendor scorecard development

We churned the client’s global procurement and spend data, performed spend analysis, cost benchmarking, and supplier evaluation to create a vendor scorecard. This helped to quantify supplier performance, map procurement spending to strategic sourcing requirements, and we were able to recommend the best possible options for supplier selection.

Impact: USD 5 million reduction in procurement spend

The manufacturing industry client used our vendor scorecard and insights to identify the most cost effective suppliers and develop effective spend practice, which resulted in better supplier relationship management, while reducing procurement spend by USD 5 million.

Schedule optimization generates 15% higher revenue for warehousing company

Business Challenge: Improving distribution revenue by schedule optimization and partner analysis

A global warehousing and cold storage company wanted to optimize its 3rd party logistics providers’ distributions schedules, to eliminate unwanted costs and also identify the best partners.

Situation: Understanding the partner schedule and spend

The client had a global network of third party distribution partners and wanted to analyze the schedule and spend for each partner, in order to quantify profitability from each schedule, evaluate profitability of each distribution and delivery schedule, and identify the best logistics partners.

Solution/Approach: Spend analysis, supplier evaluation and vendor scorecard development

We churned the client’s global distribution data and spend data, performed logistics optimization, schedule analytics, and spend analytics to create a partner scorecard, quantify the performance of each schedule, map distribution spending to strategic logistics requirements, and recommend the best possible options for to the client.

Impact: USD 5 million reduction in procurement spend

Based on our insights, the client identified the hidden costs and unnecessary wait times across various schedules, and developed strategies to eliminate them. The client also identified its most cost effective partners, and developed long term contracts with them. These enabled them to generate 15% higher revenue over the next year.

 

USD 4 million savings on procurement spend achieved by oil field services company through implementation of spend analytics solution

Business Challenge: Streamlining supplier management process for cost savings.

A leading North American oil field services company wanted to conduct spend analytics for evaluation of its suppliers to implement the most cost effective solution.

Situation: Optimization of supplier selection and management process to achieve cost savings.

The client had a global network of suppliers and wanted to analyze the spend on suppliers and procurement, quantify supplier profitability, and develop a supplier selection scorecard to shortlist ideal purchasing partners.

Solution/Approach: Spend analysis, supplier evaluation and vendor scorecard development.

We developed a solution that was capable of churning the client’s global procurement and spend data and performing spend analysis, cost benchmarking, and supplier evaluation. Based on this, the client was able to create a vendor scorecard, to quantify supplier performance, map procurement spending to strategic sourcing requirements, and identify best possible options for supplier selection.

Impact: USD 4 million savings on procurement spend.

The client used our vendor scorecard and insights to identify the most cost effective suppliers and develop effective spend practice, which resulted in better supplier relationship management, while reducing procurement spend by USD 4 million.

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