The Spend Assessment Advantage: Optimize Spend, Boost ROI

6/27/2024 Christopher Renn

Are you aware of what your organization is spending — and with which companies you’re spending? How is your spend being put to use? Are you actually getting what was promised for that spend? 

These are just a few of the questions that a spend assessment can answer. Spend assessments — sometimes referred to as spend analyses — can help organizations identify and reduce costs, improve efficiency, increase ROI, and achieve key performance indicators (KPIs). In addition, they can help unearth new ways to improve organizational performance over the long term.

What spend assessments bring to the table

Spend assessments provide valuable insights that empower organizations to make informed decisions about their spending. Here’s a detailed look at how a spend assessment can provide positive value to your business:

Streamline workflows — Are you fully aware of how your team actually gets things done? Gain a better understanding of team processes and find ways to consolidate and optimize your procedures and operations. 

Integrate technologies — Where can automation and other new or emerging technologies best be utilized within your operation? Identify specific areas that allow for the automation of tasks, control activities, and generate actionable reports.

Enhance purchasing efficiency — Is your organization keeping up with emerging procurement trends and best practices? Determine which trends are appropriate for your company, learn how to integrate them, and uncover ways to turn your buyer/vendor relationships into true partnerships.

Protect brand integrity — How is your brand faring across the entire operation? Have you become aware of any inconsistencies or unacceptable usage of brand elements by internal or external groups? Discover and monitor any activities that could pose a risk to your brand. Explore recommended control points to ensure brand consistency across all of your organization’s communication channels.

Optimize support resources — Do your various groups have adequate support systems in place? Map the organization’s current support skill sets and functions against future needs and identify additional activities that will make groups more efficient and effective.

Reduce total cost of ownership — How recently have you evaluated your organization’s product design, product mix, and production and distribution practices? Optimize for the right blend of specifications, standardization, consolidation, and obsolescence.

Improve communications effectiveness — Are you satisfied with the quality of your communications efforts? Are you seeing successful results in your outreach? Understand where your messages are going by identifying opportunities to reach the right people, at the right time, and through the right channel(s).

Conducting a thorough examination 

How does a spend assessment work? It’s important to keep in mind that one of the first steps should be to partner with a company that has expertise in spend assessments. They should be able to provide an objective, thorough examination of the various areas and components that make up your organization.

Here are the critical steps that are typically undertaken when conducting a spend assessment: 

• Collect data: Garner data from invoices, purchase orders, contracts, expense reports, and other organizational sources. Leave no stone unturned.
• Classify data: For better analysis later, organize your data by categories — suppliers, products, and services.
• Amplify data: Add supplemental information to the data —  such as supplier details, product specs, contract terms, etc. — to aid in the later analysis stage
• Spend analysis: Ascertain patterns in spending as well as aberrations; identify possible opportunities for process improvement.
• Gap analysis: Compare your current state against industry best practices and best practices within your own organization.
• Identify savings: Pinpoint where your organization can reduce costs, optimize processes, and renegotiate contracts.
• Improvement: Identify new opportunities for savings and where you can enhance accuracy, efficiency, and effectiveness.

Assess for the present — and the future

Yes, you should conduct a spend assessment to evaluate your current situation — but be sure that the assessment is also putting your organization’s mid- and long-term goals and objectives under the microscope. A spend assessment can help you build an actionable plan that’s built around all of those goals, driving better decision-making and unearthing ways to improve your organization’s performance. 

Christopher Renn is RRD’s Senior Vice President of Operations, Enablement, & Strategy. RRD’s spend consultants combine decades of experience, best-in-class tech, and production expertise to help companies achieve unprecedented levels of efficiency and effectiveness. To learn more, visit: https://www.rrd.com/services/print/spend-consulting