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Using Spend Analysis to make a difference: Harnessing the Power of Money

ICMAOne of our customers, Mike Bevis from City of Naperville, IL, writes about the challenges of spend management which can be daunting to individual organizations.  Effective spend management requires that the spend data to be in a fit state before the analysis can begin.  This is often a barrier preventing projects from getting off the ground:

“Until recently it was difficult, if not impossible, to identify where all the money went, much less direct it towards desired goals. Technology is changing this. Cities and counties are beginning to both harness the power of their spending, directing it in purposeful ways, and making it more visible and accessible to the public through the use of sophisticated spend analysis.”

Mike talks about the role of spend analysis and spend management in both internal procurement initiatives and collaborative projects with other organizations within a region:

“Spend analysis and particularly the coordination of spending information, creates opportunities for local cooperation on new levels. In regions with adequate competition, local governments and especially co-terminus governments, can combine their spend to positively impact their ability to deliver enhanced value.”

“In initial efforts to integrate and channel spending in the most effective way, the Naperville effort has identified $100 million in savings.”

In a particular scenario, savings were realized through the coordination of contract approaches where the three jurisdictions (in this case a city, a school district, and a library district) would either combine spending on a given commodity or already share contractors.

In addition to identifying savings and opportunities for collaboration with other parties, spend analysis provides the potential for greater transparency and can enhance public confidence in government.

“The best and highest use of spend analysis may not be cost savings or even facilitating intergovernmental cooperation. It may well turn out to be the ability to share spend information with the public in an immediate and meaningful way.”

City of Naperville have made their spend available via spotlightonspend: http://www.spotlightonspend.org/1061/City+of+Naperville,+IL/Spend/Monthly

Read the full article here


TAGS: icma, Naperville, spend analysis, collaborative procurement, purchasing, cooperation, collect, cleanse, classify, enrich, data process, spend data, local government

"We have been very pleased at take up under the new Spikes Cavell contract. Selecting a vendor for spend analysis normally takes Higher Ed institutions a lot of time and effort so it is great that the contract is already proving valuable to members."

Jennifer Nisbet - E&I’s Portfolio Support Executive