Information Management and Data Management

The most essential aspect about purchasing is having all the data and information about the product. Many companies have gone ahead with extensive data mining activities and had some amazing results. There is lots of examples with organizations adopting spend analysis projects at regional as well as global level to reduce spend and enhance savings.

However most of the spend analysis project simply put the readily available data like spend involving a particular category of product through a period of time and then analyze it to create value in terms of consolidation and savings. This method is very effectively used till now but organizations have to move ahead from here to tap in large about of information that is available in the system apart from simple numbers and data sheets.

To understand this concept it is very important to understand the difference between data and information. Data is essentially any kind of number i.e. part price, part number, supplier name, share of business, yearly spend, raw material / foreign exchange prices and trends etc. Information is knowledge about supplier base and part. Generally there are key suppliers in every organization and there is a continuous negotiation and interactions which takes place with them. These negotiations don’t happen only with one dep’t or person but with different persons and departments.

The reason why I defined data and information is that data analysis is becoming increasingly common but at information level even the first step of compilation has not begun yet in most organizations. Data analysis was the first step of Consolidation which has been on since a decade now. Now organizations should move ahead with information management and analysis.

The essential aspect of data and information management is that buyer should have each and every bit of information with him during its sourcing process. This will take science of purchasing to next level. I would talk about details about this thought in my next blogs and will try to explore the topic in full detail. Also I would like to involve my reader’s participation to refine my thoughts on this topic.