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Analytics’ Role in Optimizing Your P2P Process

on October 10, 2013

A recent article caught my attention in Spend Matters that advocates an approach toward spend analytics that goes beyond sourcing, and one that can be used to optimize the overall procure-to-pay (P2P) process. Spend analysis in conjunction with spend behavior analysis can yield some additional benefits to companies.

These benefits include identifying where out-of-compliance spending is taking place for good reason. Often this means using a supplier that is not preferred but is the only option based on geography or inventory. In these cases, establishing a preferred relationship makes financial sense.

Spend behavior analysis also helps to identify who is purchasing outside of preferred relationships so that training and counseling can take place to stop the out-of-compliance spending. In other cases, understanding behavior can help identify purchases that are split in order to circumvent limits and other controls. Often, splits are a sign of limits that have been set too low for cardholders and actions can be taken to adjust the limits. Behavior analysis helps to guard against one-time vendors where the purchase is for out-of-compliance items.