{"id":8722,"date":"2019-05-18T01:26:22","date_gmt":"2019-05-17T23:26:22","guid":{"rendered":"https:\/\/sourcing-force.com\/?p=8722"},"modified":"2022-09-03T19:27:02","modified_gmt":"2022-09-03T17:27:02","slug":"how-do-you-define-and-measure-accuracy-in-spend-analysis","status":"publish","type":"post","link":"https:\/\/sourcing-force.com\/en\/how-do-you-define-and-measure-accuracy-in-spend-analysis\/","title":{"rendered":"How Do You Define and Measure Accuracy in Spend Analysis?"},"content":{"rendered":"

[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ global_colors_info=”{}”][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Text” _builder_version=”4.17.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n

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A lot of spend analysis vendors use percentages when describing spend analysis and their capabilities. \u201cClassified to >85% accuracy.\u201d \u201cCleansed at 95% accuracy.\u201d Or \u201cClassified close to 100% accuracy.\u201d<\/span><\/p>\n

 <\/p>\n

At Sourcing Force we also use percentages to validate accuracy with our spend analysis. But what does this mean and what should you be looking for when evaluating a spend analysis?<\/span><\/p>\n

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Why is this so important?<\/strong><\/span><\/h3>\n

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During spend analysis, data is collected, cleansed and classified with the goal of analyzing the data to make business decisions. <\/span><\/p>\n

But if the data isn\u2019t cleansed and classified correctly, poor business, financial and strategy decisions will be made.<\/span><\/p>\n

[\/et_pb_text][et_pb_text admin_label=”Text” _builder_version=”4.17.6″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n

Who confirms the accuracy of the data?<\/strong><\/span><\/p>\n

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When using a third-party solution provider or a consultant to conduct your spend analysis, you need to ensure that you will be the one determining the accuracy of the results, not the solution provider or the consultant. <\/span><\/p>\n

What may be considered accurate supplier classification, or transactional classification for one customer, may not be accurate for another.\u00a0 <\/span><\/p>\n

The supplier Polaris is often used an example where the opportunity for misclassification exists. Spend for Polaris may be classified as a snow mobile, a missile, or as a heart monitor.\u00a0 Another example is a laptop case. <\/span><\/p>\n

Does your company classify laptop cases as a Computer Accessory, as Luggage and handbags and packs and cases, as Office Equipment and Accessories and Supplies, or something else?\u00a0<\/span><\/p>\n

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What method is used to determine accuracy?<\/strong><\/span><\/h3>\n

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Whether using a third-party solution, a consultant, or performing a spend analysis in-house, you need to use some sort of method to determine the accuracy of the analysis. <\/span><\/p>\n

Consider it an audit, or quality control, but you need to ensure that the data you\u2019re analyzing is accurate before you can trust it to make strategic business decisions. And you need to determine what level of accuracy is acceptable to you.<\/span><\/p>\n

 <\/p>\n

At Sourcing Force we use a formula that generates a representative sample of an overall data set that is approved by the client. Regardless of the method used, you need to identify and approve the method prior to the spend analysis.<\/span><\/p>\n

 <\/p>\n

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A lot of spend analysis vendors use percentages when describing spend analysis and their capabilities. \u201cClassified to >85% accuracy.\u201d \u201cCleansed at 95% accuracy.\u201d Or \u201cClassified close to 100% accuracy.\u201d   At Sourcing Force we also use percentages to validate accuracy with our spend analysis. But what does this mean and what should you be looking […]<\/p>\n","protected":false},"author":2,"featured_media":8724,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"\"\"\r\n\r\nA lot of spend analysis vendors use percentages when describing spend analysis and their capabilities. \u201cClassified to >85% accuracy.\u201d \u201cCleansed at 95% accuracy.\u201d Or \u201cClassified close to 100% accuracy.\u201d<\/strong><\/span>\r\n\r\n \r\n\r\nAt Sourcing Force we also use percentages to validate accuracy with our spend analysis. But what does this mean and what should you be looking for when evaluating a spend analysis?<\/span>\r\n\r\n \r\n\r\nWhy is this so important?<\/strong><\/span>\r\n\r\nDuring spend analysis, data is collected, cleansed and classified with the goal of analyzing the data to make business decisions. <\/span>\r\n\r\nBut if the data isn\u2019t cleansed and classified correctly, poor business, financial and strategy decisions will be made.\u00a0\u00a0<\/span>\r\n\r\n \r\n\r\nWho confirms the accuracy of the data?<\/strong><\/span>\r\n\r\nWhen using a third-party solution provider or a consultant to conduct your spend analysis, you need to ensure that you will be the one determining the accuracy of the results, not the solution provider or the consultant. <\/span>\r\n\r\nWhat may be considered accurate supplier classification, or transactional classification for one customer, may not be accurate for another.\u00a0 <\/span>\r\n\r\nThe supplier Polaris is often used an example where the opportunity for misclassification exists. Spend for Polaris may be classified as a snow mobile, a missile, or as a heart monitor.\u00a0 Another example is a laptop case. <\/span>\r\n\r\nDoes your company classify laptop cases as a Computer Accessory, as Luggage and handbags and packs and cases, as Office Equipment and Accessories and Supplies, or something else?\u00a0<\/span>\r\n\r\n \r\n\r\nWhat method is used to determine accuracy?<\/strong><\/span>\r\n\r\nWhether using a third-party solution, a consultant, or performing a spend analysis in-house, you need to use some sort of method to determine the accuracy of the analysis. <\/span>\r\n\r\nConsider it an audit, or quality control, but you need to ensure that the data you\u2019re analyzing is accurate before you can trust it to make strategic business decisions. And you need to determine what level of accuracy is acceptable to you.<\/span>\r\n\r\n \r\n\r\nAt Sourcing Force we use a formula that generates a representative sample of an overall data set that is approved by the client. Regardless of the method used, you need to identify and approve the method prior to the spend analysis.<\/span>\r\n\r\n \r\n\r\n\"\"<\/a>","_et_gb_content_width":"","footnotes":""},"categories":[36,46],"tags":[],"class_list":["post-8722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-spend-analytics","category-source-to-pay"],"yoast_head":"\nHow Do You Define and Measure Accuracy in Spend Analysis? - Sourcing Force<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sourcing-force.com\/en\/how-do-you-define-and-measure-accuracy-in-spend-analysis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Do You Define and Measure Accuracy in Spend Analysis? - Sourcing Force\" \/>\n<meta property=\"og:description\" content=\"A lot of spend analysis vendors use percentages when describing spend analysis and their capabilities. \u201cClassified to >85% accuracy.\u201d \u201cCleansed at 95% accuracy.\u201d Or \u201cClassified close to 100% accuracy.\u201d   At Sourcing Force we also use percentages to validate accuracy with our spend analysis. 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