Business Analysis Business Analysis

Why data analysis skills and thinking are important to spend analysis
Spend analysis is the process by which analysts collect, analyze and
collect data so that they can reduce procurement costs. This is meant to
improve the procurement process, but it can also be useful in planning
and budgeting. This process looks at what is being spent, who spends it
and why it is being spent. The process of spending analysis requires
data analysis skills and thinking because the process involves studying
procurement data that are generated over a given period (Bartels,
Pohlmann & Lee, 2008). These data is collected as a process of the
study initiative. The data is then analyzed critically to ensure that
the procurement process is well scrutinized. This scrutiny is what
allows analysts to do away with unnecessary expenditure. Thus, the spend
analyst requires to have data analysis skills so that they can be able
to scrutinize the data well for proper conclusion.
Whether software applications can be used to generate the information
needed automatically
Software applications are used in the data analysis process. This
compares data over a set amount of time. This software can be used
during the spend analysis process because it involves analysis of data
so as to understand the details of spending. Once the data is generated,
the analysts study the outcome so that they can come up with
conclusions. Thus, analysts can get the necessary information
automatically after which the information is analyzed. Thus, though the
software applications can be used to generate information, the data
analysts still need to look at the data closely so as to come up with
the necessary conclusions. The software applications are necessary for
purposes of generating information and thus, make it easier for analysts
to undertake the spend analysis process (Bartels, Pohlmann & Lee, 2008).
How a structured process such as Six Sigma methodology (chapter 4) can
be useful here
There are structured processes that can be used to reduce cost. The
main purpose of data analysis is to increase profits by reducing costs.
Six Sigma Methodology is one of the structured means used to increase
profitability. This methodology involves picking the most important
projects for the company and finding the best means of achieving these
projects with maximum efficiency. This means that the company dedicates
its resources towards the achievement of the project’s objectives.
This means that the process aims at efficiency. Thus, structured
processes can be used because they are also aimed at reducing costs
through efficiency and cost reduction (Aveta Business Institute, 2014).
Why it is important to get other functional areas, notably finance,
involved in spend analysis efforts
A company must also involve other areas during the spend analysis
process especially during implementation. This is because the process
affects all areas because they ought to maximize efficiency and reduce
costs. This is a wholesome process that analyzes the finer details of
all the areas. The finance department is very important in the process
because this is the one that handles expenditure (Bartels, Pohlmann &
Lee, 2008). This department has data which indicates how money is spent
and thus, it is necessary to know which areas can be used to reduce
expenditure. This data indicates which areas can be eliminated so as to
reduce costs.
Some other functional areas that should be involved here
The process of reducing expenditure is wholesome. It requires a
critical analysis of all areas of expenditure and eliminates those that
are unnecessary. Thus, other areas can be involved in the process of
reducing expenditure. Such areas include reduced personnel where not
necessary. This involves arrangement of personnel according to duties so
that the organization ensures that it has the most important personnel
only. It also ensures that duties are not thinly spread leaving
employees disengaged most of the time.
Aveta Business Institute. (2014). What is Six Sigma: An Overview of Six
Sigma Methodology. New York: Aveta Limited.
Bartels, A., Pohlmann, T & Lee, C. (2008). Market Overview 2008:
Automated Spend Analysis. New York: Forrester Research.