Good data the key to effective spend analysis

28 October 2011

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28 October 2011 | Adam Leach

Procurement needs good data in a consistent format to maximise the benefits of spend management, according to the latest CPOAgenda webinar.

Speaking on the topic of Spend Management: How to do it and how to optimise it, Rob Hindman, senior manager BPO procurement, Capgemini Procurement Services said the effectiveness of spend optimisation depends on the quality and format of data. “If you don’t know where you’re buying or what you’re buying then you’re not going to be able to get much out of spend optimisation,” he said.

He told listeners he commonly worked with clients that had multiple data collection techniques and this fractured approach caused problems in the process. Duplicated data can also cause significant issues. Referring to a past client, Hindman said: “They must have had IBM listed 11 times under different names.”

Chris Campbell, commodity sourcing manager at HSBC, agreed data quality across the organisation and the supply chain is key. “Unless the data can be collected effectively then it’s not going to work”. In order to improve collection, he recommended sending out an example of the data required, so suppliers and stakeholders can see what format to provide it in.

Martin Street, head of UK procurement at HSBC, who manages an annual procurement budget of more than $2 billion (£1.2 billion), believed spend analytics to be the “cornerstone” of strategic spend management.

“Without spend analysis it is difficult to ensure suppliers are providing at the correct prices.” He added having quality spend data is a valuable tool for meeting negotiating departmental budgets: “It allows us to have those meaningful discussions with senior budget holders.”

Chris Ayscough, purchasing director at aviation technology firm SITA, agreed that the technology opens up new opportunities, but that it is people that are key in making the most of it. “Ultimately it’s about how people pick up the baton and drive success, spend analytics is just an enabler,” he said.

* To listen to a replay of the webinar, please click here to register.

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