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Better Data for Better Value

Posted 6/15/2021

Do you know where your [organization’s] money went? There is much value in knowing this and there are simple ways to get the data with good planning.

Most organizations can run a report that shows spending by vendor. Knowing what was bought by vendor or knowing purchases of similar items from different vendors may be more complex. Data concerning goods purchased by P-Card can also yield opportunities for better value.

If your procurement systems utilize Standard Information Category Codes (SIC) you are well on the way to knowing what was bought and from whom. For others, a deeper dive into spend analysis is required to mine the data.

So why bother?

If you know you are buying similar commodities from several suppliers, better value could be obtained by consolidating procurements from fewer suppliers. If you have significant volume, discounts and value-added services could be negotiated or obtained as an outcome of a procurement request.

Ad hoc purchasing by P-Card for similar commodities could also be consolidated through tendering and creation of system contracts.

Similarly for long term and / or system type contracts for goods and / or services, knowing the type and quantity of goods or services received and disclosing this in your procurement request adds transparency to the procurement. Doing so can yield better offers from a broader marketplace.

Most vendors can provide purchase reports sorted by product and period. You could ask for this anytime, however reporting is best incorporated into your procurement request. It can then become a standard part of your contract management.

Knowing what was purchased, from where and when is data that could be used to obtain better value and when disclosed in procurements, provide equality of information to all potential suppliers, not just the incumbent supplier.