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  • Writer's picturePAAS Advisors

Better Data, Better Outcomes

Data - it is the root of every conversation and is driving decisions across industries around the globe. If everyone is in agreement that data is the key to promoting tangible success within your organization, then why is the data quality so poor?

When attempting to categorize spend through an ERP, we often find that 60-80% of items are categorized incorrectly, making it nearly impossible to promote efforts of consolidation or cost reduction. Having valuable and accurate insights into your specific spend data can be the key differentiator when it comes to spend reduction in multiple categories.

With large datasets, appropriate categorization can seem time consuming and overwhelming. Spend pertaining to indirect technology can be categorized in 1 of 2 ways, strategic or long tail. Strategic spend is identified as 20% of your indirect technology suppliers, but takes up 80% of overall spend, where long tail spend is the exact opposite, with 80% of your suppliers and 20% of your spend. If we break this down, we find that most mega suppliers like Microsoft, Google, Oracle, Workday, etc. fall into this category and are the best starting point for consolidation and cost reduction. Once strategic spend is identified, a large section of spend can been normalized to create action items and savings plans. After this takes place, the same categorization & consolidation techniques can be utilized on long tail spend. This process turns Indirect Technology spend categorization into a digestible and repeatable process for any organization in any industry.

This level of data analysis can only come from proper data preparation and ingestion into well-architected databases, which is why PAAS created the Spend Analytics Module within the PAAS360 Platform. This module identifies spending trends and savings opportunities across multiple categories of spend to help provide a clear and digestible view of spend history.

With accurate categorization and the normalization of data, tracking and managing indirect technology spend becomes a seamless aspect of the savings journey with PAAS. Through the utilization of these spend reduction techniques, PAAS has proven hard dollar and significant time savings for each of its clients. Stop overspending on indirect technology and reduce the procurement lifecycle by up to 80%.


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