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Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing by William R. Dorn, Joe Payne

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CHAPTER TWO

Data Collection and Analysis

YOU CANNOT JUDGE HOW FAR you have journeyed unless you know where you have come from. Data collection is the starting point for any strategic sourcing project and it lays the foundation for the engagement. The information you gather during this step is used to quantify results later on, but data collection is much more than just the process of gathering and analyzing data. This stage is a launching pad that sets the tone for the entire initiative. Approaching it with care can help build sponsorship within your organization, inspire collaboration, and create the required momentum to complete projects and get results.

In this chapter we start from the beginning, by looking at pulling data out of internal accounting systems and analyzing it in order to develop a list of potential strategic sourcing projects, also called a project road map. We then examine how to gather data for specific projects and kick off the initiative.

WHAT IS DATA COLLECTION?

On the most basic level, engaging in data collection and spend analysis enables you to identify your starting point. Having a detailed understanding of where you are right now in terms of price, as well as what you are getting for that price (service, quality, etc.), provides the context for analyzing offers from alternate suppliers in a much more meaningful way. In addition, establishing an accurate starting point helps justify your position when decisions come under scrutiny from your peers. ...

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