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Master Data Management & Spend Analytics

“We are investing so much in our Master Data Management efforts. Can you not use the data  that is clean and standardized during that process as a input to Spend Analysis portal – so we an achieve both simultaneously with low cost ?”. You might have heard this question – if you are in a customer meeting with those techno savvy big companies just starting off on optimization drive.

What would be your answer ? If you are a sales person – you will think of it as a another negotiating tactic by customer, if you are a IT guy – I can see that smile on your face, if you are a business person – you think its absolutely possible, and if you are a Spend Analyst consultant – your answer is Yes and No. I personally think – I don all these hats, but for this blog – I am a Spend Analyst. So let me explain why Yes and why No.

Yes – If – when you started your MDM initiative you talked to “right” consultant and created a road-map as to how you can accommodate Spend Analysis as a second goal from the same.

No – If you already travelled few miles in your MDM roadmap, and think Spend Analytics data is a by-product of that efforts automatically.

Let me explain. Since the results of Spend Analytics initiative is all based on how good your data is – Data Management becomes an integral part of your initiative. If you pull all the data from your different systems and push it to spend visibility portal – all you will get is a report which doesn’t make sense. You have to get the clean – good data. These data steps mainly include your supplier data and transactional data like invoices, PO and Contracts – with all the business rules.

We will look at all steps of data management for Spend Analytics in detail in next post.

Now how is that different from MDM ? MDM is a holistic initiative focused on data. This includes understanding of your existing data landscape, profiling all data objects, defining data governance processes,  designing the output data structures and then the operational part of actual data extraction, transformation and loading. This is a very time consuming, high cost – high return initiative across all business units. It involves mainly customer data, supplier data, product data. A part of supplier data which gets cleansed in this process can certainly utilized during Spend process – but not as it is or with the same template. Now that’s the reason, I said – if you don’t plan it parallel – you can’t match these rules and templates later. If you plan it with the “right” consultants – you can. Yes.

let me know your comments –


Prashant Mendki

Follow on Twitter – @pmendki

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