STRATTON & Co.

THE OBSERVATION

One of the first questions companies ask when they begin looking seriously at procurement is: Do we have good enough data?

Often, the answer is no.

Purchasing may happen across multiple systems. Acquisitions may bring different processes and supplier relationships. Accounts payable can tell you who was paid and how much, but not necessarily what was purchased. Supplier names may be inconsistent. Category information may be incomplete or nonexistent.

It is tempting to conclude that the first step is fixing all of the data.

Usually, it isn’t.

WHAT IT TELLS YOU

Imperfect data and useless data are not the same thing.

An accounts-payable file may not tell you exactly what was purchased, but it can tell you a great deal about how the organization buys.

You can see how many suppliers are being used. You can identify where spend is concentrated — and where it is fragmented. You can find multiple business units buying from the same supplier independently. You can spot suppliers that appear after acquisitions and remain isolated within individual locations.

Those aren’t answers.

They’re clues.

And good procurement work often begins by knowing which questions to ask next.

WHAT TO LOOK FOR

Start with a few simple questions.

• Are multiple parts of the company buying from the same suppliers under separate arrangements?
• Are there categories with dozens of suppliers where fewer might do?
• Has company growth created purchasing activity that nobody sees at the enterprise level?
• Are acquired businesses still buying exactly as they did before the acquisition?
• Are significant supplier relationships operating without an enterprise owner?

And perhaps most importantly: where is the organization spending enough money that understanding it better would actually matter?

You don’t need perfect classification to begin answering those questions.

WHAT TO DO NEXT

Don’t spend six months trying to manufacture a perfect spend cube before talking to the business.

Start with the information you have.

Use it to identify patterns. Develop hypotheses. Then sit down with the people who actually run the operation.

Ask what they buy.

Ask why they buy it that way.

Ask which suppliers matter and which are simply there because they’ve always been there.

Ask what cannot change.

And ask what nobody has ever really examined.

The data points you toward the conversation.

The conversation gives the data meaning.

Only then should you decide where deeper analysis is worth the effort.

THE STRATTON VIEW

Procurement doesn’t begin when the data is perfect.

It begins when you can see enough to ask a better question.

Discipline. Partnership. Enduring Value.

STRATTON & Co. | Procurement leadership for growing companies