Often, you will find that different groups within your own company will have different definitions of what constitutes a category. When we talk about spend cube, it's not just the three dimensions most people think of, there are multiple layers and columns to it. This tool allows you to quickly see how much you are spending on a given product or service (e.g., packaging) across all suppliers and all business units during a given time. Elements Of Spend CubeĪ spend cube is essentially a data table or traditionally, a spreadsheet, with multiple dimensions-the category, the business unit, the supplier, and the period of time or "time slice" (monthly, quarterly, annually). The result is a graphic representation of spend analysis output from which you can make decisions on what to cut or keep, where to spend more or less, and how to justify future spending. You can slice and dice your data in three dimensions - the suppliers that you buy from, the business units in your company, and finally, the categories of products that you're buying - to understand your company's financial health. Let's take that same inquisitive approach and apply it to your business's spend data. You just couldn't stop taking things apart to see what was inside. They wanted you to put those pieces back together! And you did, but then you'd have questions about how it was constructed in the first place. If your parents were anything like mine, they were less than thrilled. Remember when you were a kid and wanted to understand how the world worked, so you took everything apart? It's essentially a three-dimensional data table that allows you to slice and dice your data in a number of ways and create a foundation for insights into your spending habits, which helps improve your bottom line. The term "cube" refers to the way data is organized. It may sound like an unlikely reality show for math wizards, but the "cube" in "Spend Cube Analysis" is actually a data analysis tool generated by spend analytics. It's a three-dimensional cube that shows you how much money your company is spending on what, where, and with whom. What is a Spend CubeĪ spend cube is just a fancy name for a systemic organization of how all your spending ties together and interacts across the various dimensions-Suppliers, Corporate Business Units, and Spend Categories. When it comes to procurement, understanding organizational spend is pivotal to making sure that your company is maximizing its potential for growth and sustainability.Ī favorite method that many businesses use to analyze spend data is building a spend cube. And what better way to get clarity than from a good old-fashioned cube? That's right-we're talking about a spend cube, which is a powerful tool that provides insight into the total value of spend per category, the number of suppliers each category has, and more.įor any business, managing and controlling costs is essential to profitability. There's one thing procurement professionals are always in search of, it's clarity.
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