If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience. – George Bernard Shaw
History is something that happened a moment ago, a year ago, years ago or thousands of years ago. It is the past. Procurement teams work with spend analysis – a past look at spend – either from a moment ago, from the past few months or even the past year. Spend analysis is what has been spent and the analysis of it. Spend analysis is a tool that most procurement functions need to view the company spend. Without it, procurement only has the individual memories on what, where, how and why something was purchased. Spend data is a snapshot of the purchase, aggregated in most cases by supplier and into categories so procurement leverage can be applied, then cleansed and bounced off other data to enhance the information. Spend analysis is the tool procurement organizations need to understand their company spend.
Who controls the past controls the future. Who controls the present controls the past. – George Orwell
The present is what we know now and what is occurring now. For procurement that means planning the next RFX process, or perhaps managing a contract, relationship or sourcing event. The information we use from the past helps us put together our current data sets so we can work with our stakeholders and suppliers on a daily basis. It is about being present, the discussions and moving forward to make a difference for our companies. Improving the business profitability by capturing savings, enhancing the revenue by managing a supplier relationship and improving working capital because of contract term changes makes a difference in the present. It also makes a difference in the future outcome.
Great innovators create the future, manage the present and selectively forget the past. – Vijay Govindarajan
The future of our business depends upon our abilities to take valued historical information, marry it with our present state and then innovate with our stakeholders and suppliers for the future outcome of our business. Each of these separate tasks, information streams and viewpoints create our future. Procurement is in charge of its own destiny when it utilizes the information and starts paving its future. Procurement tools help us manage the past, present and start to predict the future because of the information we hold in our technology systems. But if you don’t use it or don’t apply it, your future is not looking too bright.
Applying our collective knowledge to the future, means the ability to predict outcomes, improve our methodology to reduce risk and to improve our businesses overall.