I cannot emphasize this enough. It is so, so important to maintain your procurement data—especially if you’ve just shelled out thousands of dollars to have it classified. Your data will almost certainly be correct when you receive it, but it will only stay accurate for a short period of time.
What are the benefits of maintaining procurement data?
Updates and changes mean that before you know it, your once neat and tidy data set will contain unclassified data, data that’s been incorrectly classified by your team or AI, typos, cut and paste errors, and accidental deletions to name but a few. And this can have a knock-on effect.
For example, let’s say you use IBM for IT services and you accidentally misclassify this spend, say it's $50k, as cleaning services. Then at the next refresh, it's picked up and classified again, and it comes to $100k and then the next refresh, it becomes $150k. You then have a major issue where you are counting your cleaning services spend as $150k plus whatever you are actually spending it on, and you're not counting the $150k of IT spend with IBM.
So, what does that mean? Well, you may have agreed to a contract with a cleaning supplier for ‘x’ amount of value based on that data. But, in reality, it's maybe half of that, so then you might not be able to honor that contract or you find yourself in a situation where you have to pay it, but you don’t actually need that service at all.
On the flip side, you could be negotiating better rates with IBM based on your usage of their products, but you don't realize because it's sitting under the wrong category at the moment, so it’s worth taking action.
How frequently should you check your procurement data?
The secret to keeping your procurement, supplier, and spending data clean is just like good housekeeping—it needs to be checked and maintained on a regular basis. In the same way you give your carpets a regular once-over with the vacuum, regularly maintaining your data makes life easier in the long run. Remember, the more data you have, the more frequently you should check it.
Perhaps you have a 3rd party supplier classifying your data for you. This is a great idea! But, it’s still really important you spot-check that data once in a while to ensure your supplier is fulfilling their obligations. And likewise if your team is classifying your data, make sure you spot-check their work once in a while to make sure everyone’s classifying to the same standards and in the same way. It can also be a good opportunity for highlighting development areas for your team.
So how frequently should you check your procurement data? Well, let’s go back to that carpet analogy.
Leaving your carpet for a week doesn’t matter. It doesn’t really matter if you leave it for a month (as long as you’re ok with living with dirty carpets). But leave that once fresh and spotless carpet too long and by the time you pull out your vacuum cleaner, your carpet will be beyond saving.
It’s the same with your supplier data and spend data. Data that’s not maintained will slowly become unusable over time. Incorrect or conflicting information will build up. Artificial intelligence outputs become corrupted. And because you can’t afford to use bad data, you end up spending significant time or money to fix the problem. Ouch!
How frequently should you maintain your procurement data?
And depending on the amount of data you have will depend on the frequency of maintenance—monthly or quarterly is optimal. I wouldn’t suggest anything more frequently than monthly, otherwise it becomes unproductive.
Regular procurement data maintenance means:
- Better data accuracy for better business decisions
- Avoiding a time-consuming and costly data clean-up operation (because your data won’t slowly become corrupted)
- A better-trained and more-responsive data team. Doing a little bit of something regularly is always easier than doing a lot of it occasionally
- An informal opportunity to stay in touch with the work your 3rd party supplier is doing