Clear Out the Cobwebs From your Spend Data
Rituals like a good Spring Clean are satisfying and necessary – and if your spend data were manifested to be an office space, you’d instantly see what needs to be done! How can your data declutter be done most efficiently?
If you haven’t added “cleanse spend data” to your spring cleaning list yet, now is the time. Spring cleaning is a term thrown around more commonly in the Western parts of the world, but many cultures around the globe have tidying traditions they observe throughout the year.
Whether you celebrate a time for renewal (and clearing out the clutter of the old) in April or another time, the same principles apply to your spend data. Hopefully, you clean throughout the year, but setting aside time regularly to do deep cleaning reaps its own benefits.
And it’s not just about cleaning – it’s deeper, like using your clean spend data to spot foundational cracks and fixing them before they become a problem.
Clearing Out the Clutter in Your Spend Data
It’s no secret that procurement doesn’t have a lot of faith in its spend data (and, for that matter, neither does finance). When your spend data exists in 10+ different systems, all with unique data models, interpreting it as a whole becomes a challenge.
And that’s before you even consider the duplicate data across systems!
Your spend analytics solution doesn’t deliver much value when your spend data itself is, well, just bad.
Spring cleaning your spend data means you tackle much of what holds procurement back from getting real insights from their spend, like:
- System consolidation
- Miscategorised spend
- Duplicative supplier names
- Lack of visualisation capabilities
- Inability to highlight spend trends or variances
According to a recent Deloitte survey of leading CPOs, procurement should prioritise data to make fact-based decisions. [JS1]
You can’t make those fact-based decisions when your spend data needs cleansing.
The Benefits of Clean Spend Data: Clear Views from Your Shiny Window
Cleaning your data isn’t far off from thoroughly scrubbing down all your windows and doors both inside and out. You have a great new view!
Focusing on clean spend data might feel more tactical than strategic – and you wouldn’t be wrong there. But, it also makes your strategic efforts more effective.
Your clean spend data delivers significant insight on how healthy your procurement spend strategy currently is and can show you options on where you can go, all backed by provable, trustworthy data (for when your friends over in finance want to see the numbers).
Clean data also enables you to see what might otherwise easily go overlooked: rogue spend. The cost-savings side of that essentially tells its own story, but that’s not where the value ends. Once you have clean data, you can do much more than just look at your internal insights.
The Not-So-Obvious: Clean Data Enables Data Enrichment
Data enrichment is a top priority across industries. Once your procurement spend data is clean, you can start getting deeper into your spend story. To go back to the clean window analogy, now that you have such a clear view, you can see what might normally be overlooked or hidden.
Now it’s time for procurement spend data enrichment.
Procurement data enrichment supports a good deal of your strategic efforts – but it can’t do much when your spend data isn’t accurate.
Focused on sustainability and need to ensure your organisation is spending with the right Preferred Suppliers you’ve earmarked based on their commitments to the environment? Looking to source locally? Pulling in data from third-party, unbiased, certified sources and integrating their data into your own internal procurement spend data gives you the insights you need to make all that happen.
Moreover, if you focus on supplier diversity data, you can see which suppliers help you deliver a bigger positive impact in your sourcing or get you closer to that Billion Dollar Round Table.
As mentioned earlier, you can find foundational cracks in your spring-cleaned spend data. Rogue spend is a big part of that, but consider this:
You find a good portion of your spend is with a newer supplier, one whose name only sounds familiar because it’s been in the news for unethical environmental and labor practices. While it’s unlikely your supplier list will ever make its way into anyone outside of your organisation’s hands, your commitment to ethical sourcing can’t reconcile with doing business with companies without the same dedication.
Your clean spend data shows you the true story of your procurement spend: who you’re doing what with, how much, and if you really should continue doing so (whether it be for ethics, cost, or other reasons).All in all, clean procurement spend data leads to better, more effective procurement. And if you don’t have that singular, clear view into that spend data yet, it’s still the perfect time for fresh starts.