Poor quality data hinders procurement savings efforts

16 September 2011

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16 September 2011 | Angeline Albert

Half of procurement managers admit their spend data is poor and they are unable to measure its quality – even though 95 per cent of the information is key to achieving their goals.

Buyers said the unsatisfactory data is a barrier to accurate and reliable purchasing processes and is hampering their ability to make savings, according the Spend Management survey published this week by DataFlux, which surveyed 110 UK procurement managers between June and August.

Although 95 per cent said data quality was crucial to achieving their procurement objectives, 50 per cent felt their data was of low quality or couldn’t measure its standard. “Having high-quality data to make procurement decisions is so fundamentally important that 50 per cent is a worrying figure,” said a DataFlux spokesman.

The survey reported data problems hinder more than a third (37 per cent) of the responding buyers from realising savings and efficiencies that spend management can deliver.

Also, some 53 per cent of respondents don’t currently categorise the things they buy with international materials classification standards. This means they have no insight into the economies of scale of certain things they purchase.

The spokesman said: “Only by assigning unique identifying codes can you identify data and make savings. By not by classifying by international standards, buyers are missing a trick and losing out on savings when they could be spotting opportunities to consolidate orders.”

Colin Rickard, business development director, EMEA at DataFlux, said: “It’s concerning to see that in these times of essential cost reduction more isn’t being done to reduce procurement waste across British industry.

“By maintaining accurate information on who is buying what, when and for how much, you can conduct powerful analysis, which can result in more efficient consolidated ordering and ultimately improve the bottom line.”

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