3. Why is it important to get other functional areas, notably finance, involved in spend analysis efforts? Can you think of some other functional areas that should be involved? Spend analysis is one of the most important parts of strategic sourcing. Before you can source anything strategically, you have to know how much you’re spending; whom you’re;

buying from; how much you are spending with each supplier;

and what parts, materials; and other tools you’re getting from each supplier. Theoretically, all that information should be easy to get. Realistically, it often isn’t easy. The data can be spread around several departments within a company and can reside in several different databases that may not be compatible. In the following paragraphs, you’ll read how different companies get around these and other problems—

and actions they have taken after analyzing their spend.

(A)cquire the Data Skills Data is only data until it’s analyzed and acted upon—then it becomes information. And the procurement function is learning this lesson in increments—as more companies begin collecting data, they realize that the biggest resource they require next is the knowledge and brainpower to analyze that data and turn it into actionable information.