Master Data Management and The World of Spend Management
Ask a businessman, the importance of spend management and you will receive innumerable answers about the essence of timely saving. However, ask the same businessman how to maintain appropriate spend management and the answers you receive may sound less than satisfactory. This is because as a businessman, his job is to keep track of his daily purchases and expenses and profit margin, usually in a written format. He stores this written data for years together and eventually discards the same, to avoid excess accumulation at his commercial space. What he fails to realise is the innumerable amount of value this written data could provide. Only if he used the same to create one unique algorithm that reflects his daily transactions, and offers scope for improvement, wherever possible. However, this is possible only with the help of powerful MDM solutions. In order to manage spend effectively, businesses often resort to implementing spend analytics solutions. Moreover, considering the importance of spend management in today’s world, a vast majority of organisations are re-evaluating their daily operations and opting for top quality, international spend management practices. They must understand that spend analytics initiatives will only benefit from the presence of good quality product and supplier data. In order to achieve this, they need to employ a master data management software that works in tandem with their business goals and requirements, and also appoint an intelligent team which works hard to achieve these goals. What comes next is regular on-going data maintenance. This phase is extremely important as it helps the data stay clean and ready for use across longer time-lines and departments. MDM and spend management always go hand in hand. In order to ensure the presence of effective master data management best practices that remarkably support spend analytics, here are a few basic guidelines that can and must be followed: Maintain a common naming structure and consistent commodity coding throughout the business and spread it across departments through item and supplier files. Merge all systems comprising of inconsistent product and supplier data into one common MDM repository. This single source will contain all accurate, result oriented data which can be utilised for timely spend management analytics. Post consolidation, focus on using master data management solutions for governance of new data created. This will result in production of new, accurate and complete master data as required for powerful spend management analytics. Work towards marketing and incorporating this new, consolidated product and supplier data source across all analytical and operational applications present across the organisation. With the help of enterprise-wide, unified data standards, you will be able to overcome a long list of issues such as poor decision making, larger spends, manual adjustments and many more. Always remember that timely spend management and MDM are two sides of the same coin.