Watch out that your spend cube does not become a spend rock!

November 18th, 2011

Spend cubes are great but as with all cubes, holes in them cause them to disintegrate over time and look more like rocks. Unfortunately rocks sink and you might too.

Just what is a spend cube?  In it’s most simple form it is a data set that includes information that when analyzed as a whole provides a better picture of your spend universe and helps to indentify categories or products and services that should go to market as well as when they should. Because it includes vendor data, commodity information and specifics relative to the related cost center being impacted, spend cubes are very complex.

Unfortunately just like the ices cubes you order in a drink (on the rocks please) a spend cube can deteriorate over time based on a number of factors. Probably the primary reason is that the originating data is not complete or scrubbed properly in the first place. This is kind of a one bad apple spoils the whole bunch issue or the wrong data bumping into the wrong data. Another reason may be that you don’t have all of the data that you need and therefore the result sets are compromised or left to conjecture. And then there is the analyst interpretation of the data and to this author that is really the most important part once you get the data sources right. This person or group of persons needs to know their stuff (industry and products) in order for the data to be interpreted properly. It’s pretty easy to read a GL and determine what suppliers you have been spending the most with. It’s an entirely different thing to understand what the market for a commodity that impacts that particular spend was during the last contract versus what it is now and how it is trending for the future.

Ask your solutions provider who will be interpreting your data and what data they will be interpreting so that your cubes stay afloat and don’t end up sinking you like a rock.

We look forward to and appreciate your comments. 

Ron Southard

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