Spend Analysis in Supply Chain Management is a process of classifying, cleansing and analyzing the spend data. The primary objective of the spend analysis to increase profitability of the organization. Both procurement and finance are the business drivers of this exercise as Chief Procurement Officer and Chief Financial Officer get very valuable insights of their transactions and spending patterns.
An effective spend analysis can unearth potential saving areas and throw light on spend patterns. The organization can then utilize this information for better supplier management, contract negotiations and deliver savings through improved processes.