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You can gain more insight from your data than you think! In this article, we take a closer look at the most common sources of spend and procurement data.
We often encounter companies that want to gain more insight from their data, but end up not using any of their data at all because they think the data quality is too poor. All companies have, as a minimum, data at the invoice level. Our experience indicates that even "limited" data provides you with important insight into your spend!
Common Sources of Procurement Data
Procurement analytics and the category structure are based on data. On a general basis, more detailed data provides greater scope for better insight. We've listed some of the most common procurement data sources below;
- Invoice system: All your external spend, and incoming invoices, can be found in the invoice system (thus ensuring completeness). And all companies have data at the invoice level. For businesses that receives electronic invoices (EHF, UBL, CEN, PEPPOL BIS etc), it is also possible to get data on invoice line level items (item descriptions/articles, unit prices and volume).
- Accounting system: Most companies have the opportunity to retrieve or enrich their spend data from the accounting system, which has several benefits. For example, accounting information can be useful when categorizing/classifying your spend.
- Purchase order system: More and more companies have data available in their purchase order systems (PO data). The benefits are here the level of data details, which is usually at the invoice line level. However, there are challenges related to the completeness of the spend data, since not all purchases are made through the system.
- Supplier master data: This data source typically only contains master information about the suppliers, such as name, organization number, location etc. However, the data provides valuable information that can help enrich your spend data, for example automatically enriching the spend with supplier financials.
- Contract data: Combining spend data with contract meta data helps you analyze contract coverage, identify leakages and get control of your maverick spend.
- Other internal data sources: Partly due to digitization, data is being collected and recorded digitally more now than ever before. This means that there are, most likely, several other data sources that can enrich your data and provide valuable procurement insight. For example, sales and operations data can provide details for benchmarking purposes, while supplier assessments provide insights into ongoing supplier collaborations.
The data sources, and the degree of detail in the data, will vary from business to business. Many organizations also combine two or more sources to get the most out of their data, where the only thing required to connect the data is unique data points.
Finally, a little tip: It's better to start using the data you have, than not to use it at all! Because using data could highlight any deficiencies, which in turn can initiate systematic measures to improve the data quality in your business.