Creating a Data Inventory Map
Your company likely has many different systems involved in procurement, each with their respective silos of data. A data inventory map is a critical resource in any spend management effort. This map includes all the expected data sources, what they represent, who “owns” them, how big they are (transactions, spend), their accessibility to your team, and how they relate to other data.
Data that is directly relevant to the payment side of things includes:
- AP Payments (non-merchandise)
- PO orders
- Other payments systems – both AP and PO
- T&E System(s)
- Capital system(s)
Related data and systems include:
- Organizational hierarchy. This includes both the codes and how they roll up into business units.
- General Ledger codes and hierarchies. All payments will be booked to accounts, so you want to understand the accounting treatment of these items.
- Contract system. This can range from a bespoke contract management system to a generic document management system to paper files. You want to have a sense of what you have access to and what is scattered throughout the organization.
- Bidding system. Do you have an RFP system? What fraction of spending is handled by these events?
- Ordering system. See what spending is going through the system or bypassing the system.
- Inventory systems, where appropriate for non-merchandise spending.
- Preferred vendor lists. You may have preferred vendor lists in some areas, such as temp labor, legal services, IT programming, hotels, etc. These vendors will be given preference, but they can’t always meet the need, so there will be some level of bypass. You want to be able to track and report on this.
Data Value Map
A "value map" is key to relating the spend analysis benefit to stakeholders. As you work with the data and start providing information to business lines and management, you’ll want to develop a value map that shows you have an understanding of what's important to them. For example:
- What are the KPIs for each stakeholder
- How the data being analyzed relates to those indicators
- What actions might they take with the data
- What sort of training or support might be necessary for them to get value
- How they might provide feedback to you
Having a data inventory and a value map at hand will help to define what a spend management effort can or should be able to accomplish. You can then develop credible ROI calculations to help drive support for cost-savings initiatives.