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What is spend data classification?
Also known as categorisation to some people, spend data classification is when you categorise or classify your data into a category or ‘bucket’ from a taxonomy or a category tree. And, what that does is it helps aggregate/combine your data into organised blocks of information.
Why should I classify my spend data?
✔ By classifying your data, you can:
✔ Increase profitability
✔ Improve cost savings
✔ Negotiate more effectively with your suppliers
✔ Spot rogue or fraudulent spending
✔ Find information quickly
✔ Run reports quickly and easily
✔ Make better business decisions
Tidying up tail spend
How’s your tail spend looking? Even though tail spend can be neglected because it’s low value, high-volume data, it can get you in a tangle. But instead of brushing it to the side, think of it like this: it’s the little bit of shampoo you can never get out of the bottle. It doesn’t seem like much on its own, but if you add all those little bits together over a year, you could have another bottle of shampoo!
Pass us your data, and we’ll sort out that messy, fiddly tail spend for you, creating significant savings and improved transparency.
How our spend data classification and normalisation service works
Step 1 – Normalisation
Before we can start classification, we need to normalise your suppliers. This is not a parent/child or financial relationship; this is simply the normalisation of suppliers to a single identifiable normalised name. This can then be used for reporting and analytics, such as spend by supplier and suppliers per category.
By normalising your suppliers, you’ll get an accurate picture of how much you are spending with them. You’ll then be able to easily view this information on a global, regional or local level.
Your classification will be more efficient and accurate as there’s less repetition of work. It also helps your data keep its COAT on.
What’s more, normalising your data helps you maintain more accurately classified data to make better business decisions.
Step 2 – Classification
Once we’ve normalised your suppliers, it’s time to start the classification process.
We can classify your data using an existing or customised taxonomy and can work from single or multiple file sources. The level of detail in your classification will depend upon the amount of information in the original file. We will ensure this is as detailed as possible unless you request otherwise so that we can provide you with the best data for your business and needs.
Here’s an example. If the description is a keyboard, it will be classified as a keyboard, not just IT equipment or accessories, unless you specify otherwise.
Data already classified?
You may already have had your data classified. However, if it’s not been classified using the correct taxonomy, you won’t be able to analyse or report on the information you need. What’s more, if multiple parties have been involved in the process, you’re at risk of inconsistent, inaccurate and misleading data.
Let us review your data, flag any incorrect classifications and correct them if necessary. The result? Better business decisions all-round.
Ready to classify and normalise your data?
All we need from you is your existing data in an Excel/CSV format. It really is that easy.
Get in touch to get started.
Read Susan's book Between The Spreadsheets
Between the Spreadsheets: Classifying and Fixing Dirty Data
covers everything from data classification, normalisation, and taxonomy design, Between the Spreadsheets shows how the COAT framework helps organisations create consistent, trustworthy data.
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