Spend analytics software is a valuable tool for procurement professionals tasked with getting a handle on spend data within their organization. You can only obtain effective spend data management by having a centralized location to capture all of an organization’s spend data.
For many years, professionals tasked with tracking the spend on a project were forced to come up with their own spreadsheets and track down relevant data from invoicing, purchase orders and other disparate locations. A comprehensive spend analytics system takes over that burden, tracking and centralizing data into a manageable tool that can give a company many answers regarding where their money is going.
While spend analytics software can help illuminate the dark corners where your organization’s money may hide, it is important to remember that it is only a tool. This tool still needs the human touch to create full value for your organization.
Raw Data Only Tells Half the Story
Pulling in all the data from your purchasing operation is only the first step in getting true value from your spend analysis reports. To get the whole picture, humans in the organization need to collaborate to consistently improve the performance of your data collection effort. Making people responsible for results at all points in the procurement path will keep a team approach in place to help control costs and manage future spending. Find experts at each point in your company’s sourcing stream, and work with them to find what information applies to each spend.
Don’t forget to look outside your company for experts, too. Your suppliers have valuable insight into items on your spend analysis reports you may not have even thought of. Work with your vendors to get their input on cost variable. Find out if your suppliers have easy ways for you to get at that data, or have ideas on where to look in your own organization for the answers.
Finding the Hidden Costs
Computer intelligence is advancing every day, but no artificial intelligence is up to putting together all the various components that make up the costs of each item in your supply chain. But even though the machine can’t accomplish this, human expertise can make sense of your inputs and give you ideas on what hidden costs might be missing from your spend data analysis. Make a regular point of tapping this human capital to provide new insights into your reports.
Rather than replace people, spend analysis software can augment and enhance the insight of the experts within your organization. Providing clear views of what was formerly only piles of spend data will allow your specialists more time to analyze the patterns that develop. Take suggestions from the specialists within your organization on ways to expand the data, and work with affiliated departments like finance to find new relationships to data you might not have previously considered important to your spend analysis. This regular review and iterate loop can develop over time into a powerful set of data collection systems to make your spend data reports even more important to the company’s bottom line.
Human Expertise Develops Efficient Taxonomies
Iteration of human input is also important in managing the taxonomies needed for efficient data collection. Computers are not yet smart enough to decipher the various arbitrary naming systems different departments may adopt for what are essentially the same items. For example, one department might refer to “paper wrap” while another department uses the same roll paper as “packaging” or another as “filler.”
Giving humans a plain view into the data that is being collected and aggregated in the spend analysis reports will allow for developing a common taxonomy across the company. This standardized reporting allows your spending solution to do a better job of building important data connections within your spend analysis.
Using a human-assisted approach to your spend data management will allow your spending solution to amplify the value of the human expertise your company already has available. Talk with one of ProcurePort’s solution specialists to get expert insight into spend analytics.