What’s in a name? A lot actually, when it comes to spend analysis. Taxonomy, the science of naming things, is critical for effective spend analysis.
To start with, it is crucial to understand why we need spend taxonomy. Some software developers might tell you that it is for accurately identifying your enterprise-wide spend with a greater depth of detail. This is one answer, of course, but it is very much a taxonomist’s answer, not a procurement expert’s answer.
In procurement, the entire purpose of creating a taxonomy is not to be able to name things to great granularity, but to be able to drive future savings by sourcing more efficiently, aggregating spend with suppliers who offer better terms, and gaining visibility of spend trends within categories that match your business.
With that in mind, one universally applicable taxonomy structure would be effectively useless. The United Nations Standard Product and Services Code (UNSPSC) taxonomy is good for identifying items with great accuracy, but it doesn’t always allow your procurement organization to source more effectively and drive savings by grouping spend into categories that you can understand.
SMART by GEP’s spend analysis capabilities are not tied to any one particular taxonomy. Yes, like other spend analysis tools, it can categorize your spend to UNSPSC, but you can easily classify to your own personalized taxonomy, developed in-house or with GEP’s assistance.
At GEP, we are experts in developing taxonomies that work for our customers. So whether you have a schema that you have developed, or if you are looking to create something from the ground up, GEP can develop a solution that meets your business needs. In fact, SMART by GEP can classify your data to multiple taxonomies, in parallel, giving you any view of the spend data that suits your business needs at any particular time. No other spend analysis software provides this kind of flexibility.