Are you reviewing to become a Certified Professional in Supply Chain Management? CPSM 1B3 covers 7 questions out of 32 questions in Cost and Finance, the second part of CPSM Exam 1. Thus, it is important for procurement professionals to have an understanding about spend analysis.

Supply Chain Leaders and organizations should use spend analysis to control the trade power, lessen costs, offer improved management and oversight of trader, and develop an informed procurement scheme. Moreover, spend analysis also includes the identification, grouping, cleansing, and analysis of all spend data for the goods and services purchased for the company.



Spend Analysis helps organizations to have a clear and detailed view of current, past and forecasted expenditures. Spend analysis can be used to make future management decisions by providing answers to the questions:

  • What was bought?
  • When was it bought?
  • Where was it purchased?
  • How many suppliers were used?
  • How much money was spent and paid for the item?

You can take your organization to the next lever by generating a strategic action based on the hard data from the spend analysis. This strategic action should connect to your company or department’s mission statement. Search for clues about where your organization wants to go as you weigh your options of what to do with the spend analysis data.

ERP Systems

Getting the “huge amount of data” you need is easy as long as you have your ERP System. Before ERP systems came along, it was hard to get data and analyze where your money goes.

SAP and Oracle are just some of data mining modules that are used to analyze and retrieve spend data.


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