Versatex Logo

Ultra-Compact Quick Reference

22-Day Critical Path

CRITICAL
Days 1-2
Setup & Prerequisites
Days 3-5
Data Collection
Days 6-8
Quality Assessment
Days 9-13
Categorization
Days 14-17
Analysis & Dashboard
Days 18-20
Recommendations
Days 21-22
Final Delivery
Days 9-13 are CRITICAL - Categorization makes or breaks the analysis

Required Data Fields

MANDATORY
STOP if any field is <95% complete
Field Quality Check Critical?
* Transaction ID No nulls, unique
* Supplier Name Standardized format
* Supplier ID Matches master data
* Spend Amount No nulls/zeros
* Currency Valid ISO codes
* Transaction Date YYYY-MM-DD format
* Description Min 10 characters
GL Account Valid format
PO Number If available
Cost Center If available

Core Analysis Formulas

Spend Analysis Basics
Addressable Spend = Total - Tax - Non-Influenceable Savings Potential = Addressable × 15% Vendor Concentration = Top 10 Vendors / Total Spend Maverick Spend % = Non-PO Spend / Total Spend Contract Coverage = Contract Spend / Total Spend
Pareto Analysis
80/20 Rule Check: - Top 20% vendors should = 80% spend - Top 10 vendors should = 50%+ spend - Tail spend (bottom 50%) should be <10%

SQL Quick Checks

Find Duplicates
SELECT invoice_number, COUNT(*) as count FROM transactions GROUP BY invoice_number HAVING COUNT(*) > 1 ORDER BY count DESC;
Data Completeness
SELECT COUNT(*) as total_records, COUNT(supplier_name) as has_supplier, COUNT(amount) as has_amount, COUNT(transaction_date) as has_date FROM transactions;

5-Level Categorization Framework

ESSENTIAL
Level 1: Business Function (100% required)
├─ Operations
├─ Sales & Marketing
├─ IT & Technology
├─ Facilities & Real Estate
├─ Professional Services
└─ Other
Level 2: Category (100% required)
└─ Specific business categories
Level 3: Subcategory (95% required)
└─ Detailed subcategories
Level 4: Commodity (80% target)
└─ Specific products/services
Level 5: Sub-commodity (Optional)
└─ Granular specifications
Never exceed 5% "Uncategorized" - this indicates poor data quality

Savings Opportunity Matrix

HIGH ROI
Vendor Consolidation
10-15%
Multiple vendors, same category
Contract Compliance
15-20%
Off-contract spending
Volume Discounts
5-10%
Fragmented purchases
Specification Review
10-25%
Over-specified products
Payment Terms
1-2%
Early pay discounts
Demand Management
5-15%
Reduce consumption
Process Automation
8-12%
Reduce manual processes
Market Testing
10-20%
Competitive bidding

Red Flags to Watch

CRITICAL
>50% spend with single vendor
>30% maverick spend
Missing PO numbers
Duplicate supplier names
Round number spending
Weekend transactions
Same-day invoice & payment
>10% "Other" category
Unusual payment terms
Price variations >20%

Essential Visualizations

Spend by Category (Pie)
Top 20 Suppliers (Bar)
Spend Trend (Line)
Supplier Summary (Table)
Monthly Spend (Area)
Price Analysis (Scatter)

Key Metrics Cards

Total Spend
Active Suppliers
Savings Potential
Contract Coverage
Maverick Spend %
Concentration Risk

Data Collection Gates

GO/NO-GO
  • 12+ months of data available
  • 80%+ of total spend included
  • All critical fields present
  • Data quality >95%
  • Stakeholder sign-off obtained
STOP if any item unchecked

Categorization Gates

QUALITY
  • 100% Level 1-2 complete
  • 95%+ Level 3 complete
  • <5% "Uncategorized"
  • SME validation complete
  • Taxonomy documented

Analysis Gates

INSIGHTS
  • Pareto analysis complete
  • Savings opportunities identified
  • Risk assessment done
  • Benchmarks included
  • Recommendations prioritized

Common Pitfalls & Solutions

AVOID
1
Analysis Paralysis
Focus on top 80% of spend first
2
Perfect Data Myth
95% quality is good enough to start
3
Over-Categorization
5 levels maximum - don't go deeper
4
Ignoring SMEs
Always validate with subject experts
5
No Assumptions Log
Document every decision and rationale
6
Unrealistic Savings
Use conservative estimates, show ranges
7
Missing Quick Wins
Identify 90-day opportunities early
8
Static Analysis
Build dynamic dashboards for ongoing use
9
No Implementation Plan
Always include actionable next steps
10
Poor Stakeholder Buy-in
Involve key users in validation process