Vendor spend broken down by any dimension or attribute

Description

This requirement expects more flexibility than simply units and dollars associated with a vendor. In this case, we're looking to analyze vendor spend over any dimension. It could be projects, services, products, sizes, colors, and so on. This functionality enables organizations to closely monitor and manage their vendor-related costs, identify cost-saving opportunities, and improve their overall financial performance. The software should allow users to define and customize dimensions according to their unique business context for more relevant and meaningful analysis.

Example Use Case

Scenario: A construction business subcontracts hundreds of pieces of their high-rise project. Vendors can be associated with individual projects, or across multiple projects. Each of those vendors has different contract terms. Reporting on this in Excel requires an enormous workbook with many sheets.

Solution: The CPM system allows the finance team to associate vendors on a 1:many basis with various projects, and track their contract terms for those projects using a contract term attribute. This allows a significant number of possible contract term + project + vendor combinations in a single sheet. Maintenance becomes much easier and reporting more accurate.

Considerations

Attributes are a specific piece of information within a dimension. In this case, Vendor might be the dimension with things like payment terms, location, or their product focus being an attribute. Not all CPM systems allow attributes, and instead use dimensions for most data. You will see attributes used heavily in a BI context, and less frequently in CPM. This is due to CPM being considered “summarized” in comparison to a BI platform.

Usually when adding more dimensions, and more attributes, CPM systems can slow down. This is because each dimension and attribute increases the size of the database as a multiple of the amount of options. When planning vendors, we recommend that users keep it simple and only plan at a level of detail that will have a material impact on business performance.

Questions to Ask a Vendor

• Custom Dimension Creation: Can your system handle custom dimension creation for vendor spend analysis, and can this be done by end users?
• Analysis Tools: What analysis tools does your software have for evaluating vendor spend across different dimensions?
• Attributes: How do vendor attributes, or attributes in general, work in your system?