Spend Analysis: The window into strategic sourcing [Hardcover]

Kirit Pandit (Author), H. Marmanis (Author)

Book Description

ISBN-10: 1932159932 | ISBN-13: 978-1932159936 | Publication Date: March 2008

A growing number of senior executives are coming to realize that strategic supply management can be a significant driver of improved corporate performance and better risk management. Spend analysis is the most critical component, and the starting point, of strategic supply management and is essential to achieving world-class performance. If you cannot analyze your spend data, many opportunities for improvement beyond the low hanging fruit are without doubt being missed. One of the foundation blocks for transforming an organizations practices to world-class supply management is the business process called strategic sourcing. And one of the requirements for enabling world-class strategic sourcing results is rigorous spend analysis.

There is a lot of confusion on what constitutes spend analysis and what benefits can it provide. Spend analysis can help improve several areas: the identification of cost reduction opportunities, the prioritization of sourcing projects, the negotiated results, and the tracking and monitoring to ensure that negotiated results reach the bottom-line. It can also play an important role in improving compliance with Sarbanes-Oxley. However, implementations are complex and involve many departments within an organization. If the implementations are done correctly, they can yield high ROI. If not, they can consume money and deliver no returns due to lack of adoption.

Spend Analysis: The Window into Strategic Sourcing is the definitive text on this important subject, written by leaders in the field. It is currently the only reference that provides in-depth guidance on what spend analysis really is, what it specifically involves, and how to use it in your journey to world-class performance. It provides both an executive overview and technical details for practitioners. Readers do not need specialized knowledge in database systems, information technology or any other field to gain insights from reading this book. It is a must read for procurement, supply chain management, operations, and finance executives, and for practitioners and consultants.

Key Features:

-Offers guidelines and examples for building a business case for spend analysis and enumerates the important factors that ensure a successful implementation
-Includes case studies and various examples of savings opportunities revealed by spend analysis
-Provides information on transaction data and source systems used in spend analysis and explores various components of spend analysis application in detail
-Compares commonly used Industry Standard Commodity Taxonomies which play an important role not just in spend analysis but across the entire ERP footprint
-Presents advanced concepts in spend analysis such as how it can be used in combination with other applications and how it can drive better compliance

Editorial Reviews

Review

This is a very well-written book that covers all topics of spend analysis in sufficient detail. Both practitioners and academicians will find the topics interesting and educational. The authors have positioned spend analysis within the overall context of a supply management program, and made a compelling case for why it is important to implement a robust spend analysis program as a strong foundation for strategic sourcing. --Jay Reddy, Former CEO of MindFlow Technology

About the Author

Kirit Pandit is Vice President of Content Strategy and Head of Product Management for the Spend Analysis and Compliance Solution of Emptoris, Inc. He has over a dozen years experience working to design and elicit value from procurement processes to enable better spend visibility and savings opportunity analysis. Kirit joined Emptoris in early 2005 when Emptoris acquired Intigma where he was CEO and co-founder. Kirit founded Intigma in 2000 with a single vision to automate the conversion of toxic ERP content sources into valuable repositories of structured information that enable all decision support systems including Supplier Relationship Management (SRM). In 2004, Intigma was providing Spend Data Management services to 4 of the top 6 Spend Analysis providers. In addition to holding the CEO office, Kirit played important roles in product management, key customer and channel relationships, and governance and financing efforts. Prior to starting Intigma, Kirit spent four years in Deloitte Consulting as a Manager, where he consulted with F-500 companies and implemented Supply Chain Optimization and eProcurement solutions. Prior to Deloitte, Kirit spend 6 years in National Instruments as a Dir. Design Engineer, where he developed cutting edge products for the test and measurement industry. He is credited with designing the smallest data acquisition PC card for the T&M industry in 1995. Kirit has published numerous papers in scientific and business journals and is a sought-after speaker at investor and industry forums. In 2006, he was given the Pro to Know award by Supply and Demand Chain Magazine. Kirit holds a B.S. in Electrical Engineering from the Indian Institute of Technology, Bombay, an M.S in Electrical Engineering, as well as M.B.A. from the University of Texas, Austin.

Dr. Haralambos Marmanis is Director of Research, and chief architect of Emptoris Spend Analysis and Compliance Applications. He has worked on the design and implementation of: network protocols; cardiovascular flow simulations; Micro-Electro Mechanical Systems (MEMS); trading applications; electronic marketplaces; supply management, and spend analysis. For the last 7 years, Dr. Marmanis work has been related to the application of machine learning and data mining techniques in the analysis of transactions for the purpose of identifying spending risks, savings opportunities, vendor consolidation, state and federal compliance, and contract optimization. Emptoris was, in 2004, the recipient of the INFORMS Franz Edelman award; Dr. Marmanis received also the Sigma Xi Outstanding Research Award, and his work was on the cover page of Visualization '99 and the Centennial volume of IEEE. His work has been supported by the National Science Foundation. He holds a Ph.D. degree in Applied Mathematics from Brown University, a M.Sc. degree in Theoretical and Applied Mechanics from the University of Illinois at Urbana-Champaign, a B.Sc. and a M.Sc. degree in Civil Engineering from the Aristotle University of Thessalonica. Dr. Marmanis is the author of numerous publications in peer reviewed international scientific journals, conferences, as well as technical periodicals.

Product Details

• Hardcover: 272 pages
• Publisher: J. Ross Publishing (March 2008)
• Language: English
• ISBN-10: 1932159932
• ISBN-13: 978-1932159936
• Product Dimensions: 9 x 6.3 x 0.8 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #60,039 in Books (See Top 100 in Books)
  • #15 in Books > Business & Investing > Industries & Professions > Purchasing & Buying
  • #63 in Books > Business & Investing > Management & Leadership > Production & Operations

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

5.0 out of 5 stars Best business book of the year, March 28, 2008

By 

Michael Mimo (New York City, NY USA) - See all my reviews
(REAL NAME)   

This review is from: Spend Analysis: The window into strategic sourcing (Hardcover)

Spend Analysis is a superior book on the subject of Strategic Sourcing. If your interest is to find massive cost savings for your business then this book is for you. The authors detail every aspect of spend analysis in an intelligent and myriad display of awareness on the subject. Mr. Pandit and Dr. Marmanis are clearly leaders in this field. A rare opportunity exists to absorb their knowledge and apply spend management to your ROI as you never thought imaginable.

As a finance officer, this book provided me a unique blend of technical and business descriptions in the field of procurement, supply chain, and operations. Each chapter is divided into three equal parts explaining the business concepts, technical analysis and case study examples. It combines all the ingredients that naturally constitute a successful business book.

I literally read this book over the course of one day. After words I distributed copies to my finance department and data warehouse employees. The book provides insight into spend analysis at three levels. First, spend analysis business model concepts. Second, a practical and highly useful approach to the implementation of spend analysis. Third, vital methods on how to interpret the information so as to achieve a significant advantage over your sourcing partners.

For example, first the book translates abstract ideas into rich comprehensible models such as the "hypercube". A plethora of data exists in our procurement systems that on the surface are difficult to extract in a meaningful way. The spend analysis models help transmute your perceptions of the transactional data into high quality information. Second, the case study about the agrochemical business proves beyond a doubt that the authors have not only thought about the ideas but are real life implementers of Spend Analysis. Just review for yourself the project plan requirements, principles and detailed data structure solutions . Third, this book will guide you through the process of finding "Opportunity Identification". These are critical hidden values that will strengthen your negotiation opportunities. Ultimately, from my experience this is the end game.

Finally, in today's difficult economy "Spend Analysis" will help your organization save money. This book couldn't have appeared at a better time. Now is the time to start implementing some real cost savings for my fortune 500 Company.

3 of 3 people found the following review helpful:

5.0 out of 5 stars The best book on the subject of analyzing expenses, March 23, 2008

By 

A. Bhandari - See all my reviews
(REAL NAME)   

This review is from: Spend Analysis: The window into strategic sourcing (Hardcover)

This is the best book on the subject of analyzing expenses; in fact, it is the only book that covers this subject!

I have worked for over three years in spend analysis from a technical perspective, so when I found out that a book on the subject was finally published I decided to give it a try.

The pace was right, and smooth, because the authors anticipate a lot of the questions that a reader may have. The book covers both the business aspects and the technical aspects of conducting spend analysis. If you are a commodity manager, you should memorize chapters 4 and 7! If you are responsible for data warehousing , part II of this book is a must-read, even if you do not work on spend analysis or sourcing! If you are new to procurement, Part I of this book will introduce you to the subject of spend analysis and its value. If you are an experience procurement person you will find this book invaluable for its insight and depth.

The book is great for anyone who feels that they need to advance their skills in sourcing and, especially, strategic sourcing.
I've read short reports on spend analysis before (from Aberdeen, Gartner, etc.) but it never sank in. What's great about this book is that
the authors give very clear definitions of key terms and then they take you step-by-step through each topic and how it is reflected in the real world cases.

Despite the great breadth and depth of the book, it is not too long, it is succinct from start to finish. This allows you to go quickly through the entire book; but yet, if you read a couple of chapters a second time, like I did, you will be able to get even more out of the book the second time! That's awesome!

The book is a bit expensive for a technical person but its value is far greater than its price. It is an excellent book of enormous value and I highly recommend it.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Everything you've always wanted to know about spend analysis, March 26, 2008

By 

Sherry R. Gordon (Concord, MA USA) - See all my reviews
(REAL NAME)   

This review is from: Spend Analysis: The window into strategic sourcing (Hardcover)

Spend Analysis: The Window into Strategic Sourcing is the ultimate handbook on spend analysis for firms who are looking at spend analysis software solutions to better understand their procurement spend and pursue opportunities such as leveraging of purchases, supplier consolidation, parts rationalization, reduction of maverick spend, contract compliance, etc. The book also provides a detailed guide for those companies who currently have a spend analysis solution and are looking for approaches to further improve its deployment and use and its return on investment. Using numerous company case studies, the book addresses the issues and challenges that real-world companies have faced as they tackle the question of exactly how procurement dollars are spent and the financial payback for gaining a better understanding of this spend. I liked the way the book is organized so that both those in management and those who are doing the actual detailed implementation work can find pertinent information. If your company is involved in or considering a spend analysis initiative, this book is a valuable resource.