Lowe’s®, a US home improvement retailer, announced this week plans to acquire Rona, a Canadian home improvement retailer. The move is great for both Lowe’s and Rona. Lowe’s has identified more than $1 billion (US) in opportunities for the combined entities including extending private label and e-commerce capabilities, leveraging supplier relationships and increasing scale.
Spend analysis is the process of aggregating, classifying, cleansing, enriching and analyzing data. The output is the scope of your spend including (but not limited) the type of spend, suppliers and monetary value. Mergers and acquisitions are built on the opportunities each company possesses and leveraging the benefits together. Spend analysis is a critical tool for mergers and acquisitions because it leverages spend volumes that have increased because of the newly combined business.
The best businesses utilize spend analysis tools to identify opportunities to leverage and lower costs, supplier rationalization and to uncover compliance issues. With spend analysis Lowes and Rona enhance their ability to quickly bring post-acquisition savings but also to enable a strong strategic procurement team. Alignment by both companies can be quick and easy when working from the same baseline that is offered by spend analysis. Spend analysis also increases the business knowledge of the combined supply base and enables greater visibility across the enterprise into the amalgamated spend. Spend analysis is the precursor to a successful post-merger and acquisition execution.
Gartner noted “Spend analysis is one of the most important processes in procurement. The output is a foundation for organizing, planning and managing procurement activities.” Click here to learn more about BravoAdvantage Spend Analysis.