In todays electronic environment businesses must deal with enormous volumes of data from a variety of sources. Keeping track of how much a company is spending on goods and services, and identifying opportunities for cost savings, is no easy task.

The job is often made harder by the inefficient expense management processes evident within many organizations.

An employee placing an incorrect account code against a vendor is one example of a simple mistake that can cause endless confusion.

Another is the creation of multiple entries for the same vendor in an accounts payable system. In this all-too-common scenario, different employees (often working in unrelated areas of the business) enter the same vendor under a variety of names - so for instance John Brown Ltd may become JB Ltd, John B. Ltd or just J. Brown.

As the number of entries multiples, it becomes increasingly difficult for a company to keep track of exactly how much money in total is being spent with a specific supplier.

In such circumstances, opportunities to cut expenditure through the negotiation of more favourable rates for example - can be easily overlooked.

A companys ability to deal with such issues is considerably enhanced if it uses a single accounting platform. But it is not uncommon for businesses to actually compound the problem by using multiple accounting systems, making it almost impossible to unite data in a coherent and cost-effective manner.

Analyze this but first call IT

It is the role of sourcing analysts to drill down into expense data to gain an understanding of how a business operates and uncover ways to reduce or eliminate costs.

A good analyst will do everything from ensuring business units comply with expense policy to identifying leakage to non-contracted suppliers.

By extracting information that is meaningful and timely, analysts enable organizations to develop intelligent, data-driven spend decisions.

But to deliver high-quality analysis they need tools that are both flexible and intuitive.

Unfortunately, flexibility has not been a key element of many analytical software solutions. As a result, analysts have been forced to turn to their IT departments every time they need to view data in a new way resulting in lengthy delays, lost opportunities and frustrated employees.

Power to the right people

New technology solutions developed in the US have addressed this problem, and now provide analysts with an unprecedented level of agility.

These solutions are exceptionally fast, enabling users to drill through a couple of millions lines of data within a couple of seconds using a standard PC.

But most importantly, they give analysts the ability to restructure and manipulate data without the need for IT support.

That means the power to undertake key tasks - such as assigning vendors to correct parents or linking general ledger codes to easily understandable commodity groups is finally in the hands of the experts.

These new solutions also simplify the task of managing data spread across multiple systems, creating more opportunities to identify cost savings.

In addition, they are more cost-effective than earlier generation products, providing businesses with real alternatives to existing reporting and warehousing systems.

The bottom line

Any business that can rapidly detect cost saving opportunities will enjoy a competitive advantage. To gain that edge it is important companies eliminate inefficient expense management processes. But it is just as vital they give sourcing analysts access to the latest generation of technology solutions, enabling them to work faster and smarter.