In its journey of maturity, procurement has gone through dramatic changes, evolving from a tactical function to a digitalized, strategic process.
Spend Visibility: It’s Best in the Raw
The best jokes are those in which the various players can switch identities without any loss of meaning. Those jokes which absolutely depend on one character being a certain nationality or race tend to fall flat on modern multi-cultural ears. However, a good joke is always funny whether the protagonists are an Englishman, Scotsman and Irishman or a Data Analyst, a Consultant and a Lawyer. Guess which of those three gets to be the butt of that particular threesome!
One of the classics in which the two players could be any local and any visitor goes like this (I shall locate this story in my home town in rural England): a chap from London in his nice posh car pulls up at a gate which is currently being leaned on by one of local lads.
"I say!" Calls our city gent "how do I get to Winchester?"
"You be wanting to go to Winchester?" Replies the lad.
"Ye-es" says our man, a little too loudly (the lad's from Hampshire, not deaf, after all) "that's right! Winchester!"
"Problem is, for Winchester, you don't want to be starting from here!"
OK, so not the best joke you've ever heard but it came to mind just this morning when I was meeting with a prospective client to talk about spend visibility, big data and all that good stuff.
With the best of intentions of course, and having applied a very great deal of resource and brain power (and inevitably cold hard cash) our clients had built a program of data capture, manipulation and transformation, based on all sorts of rules and manual interventions all designed to make sense of their global spend patterns. I got the impression that they felt that had created a bit of a monster but they'd yet to get anything really, you know, useful out of it.
Perhaps it's a familiar feeling?
What we need now, they said, is something to bolt on to the end of this process to make sense of it all, to give us the visibility we need. Perhaps, you can see where this is going, because I did indeed have a little voice in my head saying, "problem is, squire, you don't want to start from here."
To offer another analogy, any DIYer who's ended up calling in a professional to...er...'finish off' will be familiar with the sinking feeling that follows "I see, who did this little lot then?"
Making sense of a vast volume of data is as much about where you start from as about how you get there. In much the same way as a reputable plumber might say "No! For pity's sake don't 'start it off' for me!" a solution designed to make sense of bulk raw data typically works best if it's fed what it expects, bulk…raw…data.
If your spend data is in a bit of a global pickle then there are folks out there whose business it is to straighten it out and craft the metaphorical silk purse from the sow's ear. When we start from the very beginning it is a good deal easier to deliver the visibility and business intelligence required. Look at it this way, every piece of data that is "cleansed" out of your system is a piece of data you will never get back and you wouldn't believe how important some of those little nuggets can be. A good deal of "signal" can be lost when correcting for "noise", to mix a metaphor.
I would argue that focussing effort on tidying up your historical spend data yourself is wasted effort and far more costly than getting the experts in to do that for you. I would say that, of course, it's my job, but that notwithstanding, where you should be focussing all that effort and expertise instead is in the systems and processes and solutions that change the very nature of the raw data that you're ADDING to the pot from now on. Basically stop feeding your Big Data pool with messed up and chaotic information and make sure what’s going in is now ordered and accurate.
The notion is one of transforming your operational purchasing landscape so that your raw data looks just like data that has been through a Spend Analysis process - right from the get-go. Thus, over time the vast vat of alphabetti-spaghetti data that is sloshing around will be steadily drained and replaced with ordered, accessible, reportable data - available, at source, at the touch of a button.
The trick is knowing that you need to start from here, not from there, and a smart investment in the right spend visibility solution could save a small fortune, and that, my friends, is no joke.
Finally a word of caution, beware the plumber that DOES say "can you just start it off for me?" This is, of course, another analogy which I'm sure doesn't need explaining.
Note: This post was first published on the Spend Matters blog.
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