Tomorrow’s PI Window on Business Panel Discussion on Spend Intelligence Inspires Debate

Whenever you bring together a group of thought leaders and practitioners to discuss a topic which by its very definition ensures diverse views you have the makings for a program that will be both informative and engaging.

Tomorrow’s PI Window on Business Show will be that and more as I am joined by a guest panel to discuss and debate the differences between Spend Analysis and Spend Intelligence.

Even before the show’s air date, we have already received contradictory if not insightful opinions on said differences through a question posed by the Spend Intelligence Resource Group on LinkedIn.

I am of course happy to share just a few of the comments that were received, and would encourage you to tune in (and even call-in) tomorrow between 12:30 and 1:30 PM EDT to the PI Window on Business Show on Blog Talk Radio.

Q.  What is the difference between spend analysis and spend intelligence?

Respondent: Rob Handfield, Bank of America University Distinguished Professor at NC State University and Owner, Supply Chain Redesign LLC

LinkedIn Profile: http://www.linkedin.com/pub/rob-handfield/0/570/939

These are two completely independent subjects. Spend intelligence, or what I call, supply market intelligence, refers to a capability directly related to an organization’s ability to collect external market data, most of which is “street knowledge”. The ability to process that intelligence and apply it in an effective manner is the analysis part.

We are currently conducting a benchmarking study on this – interested parties can contact me directly.

Respondent: David Music, Technology Focused Industrial Engineer, Director at Newmark Knight Frank

LinkedIn Profile: http://www.linkedin.com/in/davidmusic

The difference between Analysis and Intelligence is one of front-end vs. back-end time to result.

Analysis implies that your system gives you a data output but doesn’t tell you what that data says or means. There is a lag to get results because analysts need to go through and look for the answers.

Intelligence implies that your system is smart enough to interpret the data and give you feedback on appropriate actions. Answers and results are immediate but it takes a lot more front-end time to create intelligence and it usually means a more custom and less flexible solution.

Respondent: Respondent: Kevin McHenry, Logistics Consultant at Saudi Aramco

LinkedIn Profile: http://www.linkedin.com/in/kevinmchenry1234

Spend intelligence takes spend analysis a step further. It enables the enterprise to take what it knows from the spend data it has gathered and use it to act on forward-thinking initiatives. In other words, spend intelligence provides actionable information.

My interpretation of the statement above, taken from the article, means the system will now do the analysis on spending the money versus a human taking the information and making an intelligent decision on how to spend it. It’s tool to help make decisions more intelligent.

If you look around at the different software packages that are being offered in the Supply Chain you’ll notice the words business intelligence, distribution intelligence and supply intelligence are popping up. Form my understanding this is a term that companies are using as a marketing tool. What they are doing is collecting data, analyzing the data then creating a dashboard to present the information. There is no intellegent decision being made by the software itself. It’s a tool that is being used to help individuals make “intelligent decisions”.

Respondent: Shivendra Yadav, Management Trainee at Institute of Management Education

LinkedIn Profile: http://www.linkedin.com/in/shivendrayadav

Spend analysis is a process in which expenditure data is collected, cleaned and analyzed with the purpose of reducing procurement costs, improving efficiency and monitoring compliance.

Spend analysis can provide answers to such questions as:
What was bought
When was it bought
With whom did we buy it
How much did we pay for it
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Spend intelligence takes spend analysis a step further. It enables the enterprise to take what it knows from the spend data it has gathered and use it to act on forward-thinking initiatives. In other words, spend intelligence provides actionable information.

Spend intelligence helps an organization’s efforts to bring more spend under management, which is a key strategy for chief procurement officers.

SO SPEND ANALYSIS IS LIKE FINDING A PROBLEM AND SPEND INTELLIGENCE IS FINDING A SOLUTION TO IT…..

What are your thoughts?  Do you agree or disagree with the above comments?

Of even greater interest, what does spend analysis and/or spend intelligence mean to your organization in terms of optimization?

Remember to tune in tomorrow to listen as well as share your thoughts through the Live On-Demand Player below:

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Be sure to visit the Spend Intelligence Resource Group on LinkedIn to both share and discuss your thoughts regarding emerging trends and practices in Spend Intelligence. (Note: If you are not already a member of LinkedIN or Zycus, joining is free and only takes a few minutes to register.)

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