Importance of Data Analysis Skills to Spend Analysis

The findings are then presented on an easily understandable format. Data analysts are useful in helping companies make decisions effectively in areas such as, prediction of the trends and behaviors of customers as well as increasing business productivity with so much ease and by even driving the decision making process effectively. In this very advanced technological world, which is moving very fast, data analysis skills are increasingly playing a crucial role in business, including in spend analysis. But, why are these data analysis skills a very important aspect in spend analysis? First of all, it is important to note that the presented data is not always crucial in making strategic decisions. However, data analysis skills, and thinking, are required when there is a large data, so as to help one make sense of that information.

49) Moreover, data analysis is helpful in making sound decisions. These decisions are as a result of identifying the more meaningful information ant then studying the patterns and trends, consistencies and inconsistencies. Also, data analysis is important not only in helping internal clients formulate strategies on how to spend but also understand she costs proposed by suppliers. In addition, most results that are generated automatically do not give the actual information that is needed. In a nutshell, in any spend analysis, it is important to know what data is meaningful and also understand what the results mean in order to apply them in the real world. 4 defects in a million opportunities. A defect is anything that us outside of the expectations of a given customer.

An opportunity is the number of probable chances for having a defect. The major goal of Six Sigma Methodology is to use a quantitative strategy in the improvement and variation reduction by applying Six Sigma improvement processes that are usually achieved through the use of two main sub methodologies namely DMAIC and DMADV. The DMAIC method defines, measures, analyzes, improves and controls processes. APQC's indicates that more than 90% of the organizations and firms have adopted the spend analysis programs. Such firms and organizations tons to have a number of benefits including cost effectiveness and process efficiency. Moreover, their procurement performance provides insight into their potential for improved supplier relationships. Information is the starting point of superior procurement performance and supplier relationships.