What are my options for implementing Spend Analytics for my organisation?

When you’re considering implementing spend analytics for your organisation, the approach you choose will greatly affect how quickly you see results, the quality of insights you gain, and the overall return on investment (ROI). To help you decide which path suits your procurement needs, let’s explore your options and the pros and cons of each.

  1. Existing Financial or Purchase Order System Reporting
  2. Excel Analysis using data from your Financial System
  3. Build it yourself – with a number of tools like Power BI / Tableau
  4. Get your internal “Business Intelligence” Team to build a solution for you
  5. Get a Procurement Consultant top build it for you (or provide standard dashboards)
  6. Implement a purpose-built Spend Analytics Solution

1. Existing Financial or Purchase Order System Reporting

One of the most straightforward options is to use the built-in reporting tools that come with your financial (aka ERP) system I.e. SAP, Oracle, Technology One, Pronto, etc) or your Purchase Order system (ie. Coupa).

Pros:
These are often ready to use right out of the box, making them immediately available without any additional software costs. Built-in tools keep your data consistent by centralising it in one place, which reduces the chances of errors. Plus, if your team is already familiar with the ERP system, there’s little to no learning curve.

Cons:
However, these built-in reports can be quite rigid, offering limited flexibility for deeper customisations. As your reporting needs grow, you might find that these tools aren’t scalable enough to support more complex analytics. ERP systems typically offer only basic reporting and lack the advanced analytics, predictive modelling, or visualisation tools that more specialised platforms provide. Additionally, since you are reliant on the vendor for updates and improvements, you might find yourself constrained by the ERP’s capabilities, especially if the vendor doesn’t upgrade as quickly as your needs evolve.

2. Excel Analysis using data from your Financial System

For many organisations, Excel remains a go-to tool for reporting and analysis.

Pros:
It’s cost-effective and widely available, with most employees already proficient in its use. With Excel, you have the freedom to tailor reports and analyses to suit your exact needs without being restricted by predefined templates. It’s especially useful for smaller datasets, where you can quickly manipulate the data and generate insights.

Cons:
But while Excel offers a familiar interface, it has limitations—particularly when dealing with large datasets. Extracting and updating data manually can be time-consuming, and as the volume of data grows, Excel struggles with scalability, often leading to performance issues or crashes. Collaboration can also become a challenge, as sharing reports without proper version control can result in confusion or errors. Finally, manually handling sensitive procurement data in Excel can increase the risk of data breaches or corruption.

3. Build it yourself – with a number of tools like Power BI / Tableau

If you’re looking for a more advanced solution, tools like Power BI offer dynamic dashboards, interactive visualisations, and the ability to manage larger datasets.

Pros:
These tools are scalable, meaning they can handle increasingly complex queries and larger volumes of data. One of the key advantages of Power BI is the ability to automate data refreshes, which saves time and reduces manual intervention. Furthermore, Power BI integrates with multiple data sources, so you can build a more comprehensive view of your procurement activities. It also encourages a self-service approach to reporting, enabling business users to create or modify reports without waiting for IT.

Cons:
Building your own spend analytics system using tools like Power BI or Tableau can have some significant drawbacks. One major challenge is the need to piece together multiple systems that you may not have full control over. These systems can change without your knowledge or notice, which can cause disruptions in your reporting processes. Even when the tools are set up, manual processes may still be required to ensure they work together smoothly, adding inefficiencies and increasing the risk of human error.

There are also concerns about ongoing support and potential breaking changes. Updates to one of the systems could cause compatibility issues with the others, requiring constant monitoring and adjustments to maintain functionality. This can lead to significant maintenance demands, and without proper documentation, troubleshooting problems can become time-consuming and costly. Additionally, building a system from disparate tools often creates a single point of failure—if one component breaks down, the entire analytics solution could stop working.

Given these issues, building your own system may not be the best long-term solution. The ongoing maintenance requirements, along with the need for continuous updates and support, can make it unsustainable as your business grows or evolves.

4. Get your internal “Business Intelligence” or IT Team to build a solution for you

For a highly tailored solution, you could engage your IT department to develop an integrated Power BI reporting system that is designed specifically for your business.

Pros:
This approach allows for complete customisation to meet your unique needs. IT can ensure that data is consistently extracted, cleansed, and managed, while also automating data integration from multiple sources. Security is another benefit, as IT can enforce strict data governance protocols, protecting your sensitive procurement data. A system developed by IT is also scalable, and designed to grow alongside your business as reporting needs become more complex.

Cons:
The downside to this approach is that it can be time-consuming, especially if your IT department has other priorities. You may find yourself dependent on IT for updates or changes, which could slow down your agility in responding to changing business conditions. Custom solutions also come with higher upfront development costs and will require ongoing maintenance as your requirements evolve. Finally, this would probably be the first time that the business has created a Spend Analytics tools so while they could probably get some basic reporting done quickly, understanding the requirements of what a Procurement Function needs to be effective, could take considerably longer and therefore significantly increase the cost.

5. Get a Procurement Consultant to build it for you (or provide standard dashboards)

Pros:
Hiring a procurement consultant to build your spend analytics solution offers several key advantages. Their expertise ensures that the system is developed according to industry best practices and is customised to meet the specific needs of your business. Consultants often accelerate the implementation process by providing pre-built dashboards or ready-made solutions, allowing you to see results faster. This also reduces the burden on your internal IT team, as consultants manage the integration with existing systems, making the transition more seamless. Additionally, their ability to tailor the system to your exact requirements provides flexibility and scalability as your business grows.

Cons:
Despite these benefits, this approach can result in a similar challenge to building the system yourself—connecting disparate systems that may not fully integrate. Over time, this could lead to the same long-term issues of managing a fragmented solution, with multiple systems that need constant coordination and updates. From a long-term perspective, this could make the solution as difficult to maintain and scale as a DIY approach, requiring ongoing manual processes and maintenance to keep everything working together.

6. Use a purpose-built Spend Analytics Solution

Another option is to purchase a ready-made spend analytics solution.

Pros:
These programs are designed with industry best practices in mind, often offering predefined metrics, reports, and insights that align with procurement needs. An off-the-shelf solution can be implemented quickly, providing faster time to value compared to building a custom system. Many of these programs offer advanced analytics features such as machine learning, predictive analytics, and benchmarking against industry standards. They’re also scalable and flexible, allowing for deep customisation as your business grows. Additionally, you benefit from continuous updates and ongoing support provided by the vendor, keeping the system current with minimal effort on your part.

Cons:
However, off-the-shelf solutions can be expensive, with ongoing licensing or subscription fees adding to the total cost. Integration with your existing systems—particularly if your ERP has proprietary formats—might present some challenges. While these programs are flexible, they may not cover every specific need of your business, and you’ll be dependent on the vendor for any updates or fixes, which can limit your control over the system.

Summary:

In the past, organisations had limited options for spend analytics, often relying on Excel, ERP reports, or DIY data visualisation and a bunch of bespoke data cleaning and categorisation tools. Today, customizable, purpose-built solutions offer powerful insights that procurement teams can grow into over time.

Selecting the right approach depends on your strategic goals, organization size, data complexity, and budget. If data analytics, especially spend management, is a core competency and strategic focus, an internally built solution may be ideal. For others, the “Build or Buy” decision requires thoughtful evaluation to balance immediate needs with long-term value.

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