By: Clive Longbottom, Head of Research, Quocirca
Published: 6th August 2010
Copyright Quocirca © 2010
It is not just UK plc that needs to balance its books. Many businesses face the same challenge as the country slowly recovers from recession. The upturn should lead to an increase in sales for many businesses, but it also makes sense to cut costs wherever possible.
Of course, the UK’s new coalition government is doing this big time. To sell its austerity package to the voters it is keen to make sure that it makes what is sees as it predecessor’s profligacy clear for all to see. To this end it wanted to publish data on government spending as quickly as possible.
To help achieve this it used a spend analysis service from UK-based software-as-a-service (SaaS) vendor Rosslyn Analytics, whose RA.Pid service was used to extract, process and enhance data from the UK government’s COINS database. Some 30 million rows of spend data were processed in around 18 hours. The data is now available for public scrutiny.
Most businesses do not want to make their own spending so public, but internally the same level of insight can be invaluable. Better decision making and optimisation of spending can be achieved when there are answers available to questions such as;
· How many contracts do we have with a given supplier and can we get a better price by consolidating them?
· Do we have multiple suppliers for the same components in different parts of the business?
· What is the risk profile of a given supplier, does it make sense to pay more for stability of supply?
· Is the supplier meeting the latest standards required by the business?
IT departments are the (sometimes unwitting) guardians of spend data. However, because it is often spread across a bewildering array of ERP, accounting and contract databases it is hard to get an aggregated view. The Rosslyn Analytics service has pre-built interfaces to most common applications that hold spend data and also provides access to external sources that enable the enrichment of the spend data with information about suppliers and so on
Rosslyn Analytics claims to have the first fully automated on-demand spend analytics service. Other vendors such as Zycus and Emptoris offer spend analytics as part of their product range but as on-premise implementations. Some try to achieve the same end with business intelligence tools, but these do not have the capability to integrate and enrich spend data and are more suited reporting on the consolidated data after it has been run through a spend analytics service.
IT managers may be wondering how they can continue to add value to the business when their own budgets are under pressure. Demonstrating that a certain initiative can pay for itself in a short space of time is a sure way to get the business listening. Saving just 5% on a spending budget of £1M is more than enough to set up and pay for an initial subscription to a spend analytics service and a chance for IT departments to remind the businesses they serve of the value that can be provided from the data in their charge.
Quocirca’s report A gift from IT to the business is freely available here.
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