Procurement Glossary & Terminologies
Category Management (CM) is defined as a strategic approach in procurement wherein organisations consolidate and manage their spending across a range of goods and services. CM is a cross-functional, systematic process that involves defining categories, spend analysis, market analysis, and other processes, that empowers procurement teams to structure data. From direct materials to office suppliers, category management is an easy-to-use solution that stimulates collaboration with vendors and eliminates the need of spreadsheets.
While categorising internal products/services might seem tedious, businesses that utilise category management have reduced their PO processing time to 6-8 hours as compared to the previous 15-18 hours. Efficient category management helps businesses identify cost savings opportunities and generate value for procurement processes.
Benefits of Category Management
- Centralised spend data across categories and services
- Streamlines business strategy to achieve specific goals
- Improved vendor risk management
- Greater spend visibility of tail spend across categories
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