You have the data, but what is it telling you?
Data has become one of the most valuable assets a company can have. And when it comes to procurement, having reliable, accurate and up-to-date data is the key to carrying out successful strategic work that will bring the company the best deals and savings. But does everyone know how to analyse data and discover what exactly is happening in the business?
Most procurement professionals are well aware that data can tell a lot, they're not just numbers to be consulted, they are insights that will tell a detailed story of what is going on around the company, what their supplier's situation is and how the market is doing in general.
There is basic information that most systems can show and is easy to analyse, like where the spend is going, what are the total costs, where the next savings can come from, and so on. Procurement data should also go further and show the types of suppliers the company has, how much is being spent in each category or activity.
Some companies are already making the investment to have in place data that will show possible risks along the supply chain, so procurement can avoid them, along with the next trends and market forecasts. So data is telling procurement a lot. But what procurement does with the data is what really matters.
When spotting spending patterns and repetitive behaviours, taking a step back to analyse why it's happening is really important – it's normally around processes and spending that have always done in the same way, so no one pays attention to them, that the best opportunities can be hidden. It's the chance to change the process, find a new supplier and do things differently to save costs.
Keeping the data clean and accurate
Data is a key element for procurement and should be used as a valuable resource as it can tell critical things from the business itself and the market. But for that to happen, the data needs to be clean, accurate and consistent.
For that, most companies use the COAT principle, which consists of making sure that the data is:
- Consistent: Keeping the data in the same format, with consistent information, will make the search and the analyses much easier. Using the same labels and classification will ensure that everyone is looking at the exact same data.
- Organised: Data will only be useful if it's organised. If the information is all over the place, it becomes almost impossible to find anything and take insights out of it.
- Accurate: Accurate data is correct data. If the information is not right, the company will make the wrong decisions. It's important to take the data only from the right sources and ensure that the right people will have the power to change it.
Trustworthy: Trusting the data is critical. If significant decisions will be made out of the information available to procurement and the company itself, they need to be able to trust the data.
If you would like to take more control of the data running through your tail spend, find out how Maistro's innovative digital solution can make it a reality.