Data Analysis Skills and Thinking Abstract
DataAnalysis Skills and Thinking
Abstract
Dataanalysis can be described as a process that entails the inspecting,cleaning, transforming as well as the modeling of data in order tohighlight important information, unveil viable conclusions and tosupport the science of decision making. Simply, theinformation from different sources is collected, studied thenanalyzed to deduce a conclusion or finding. There exist a variety ofparticular data analysis methods such as data mining, datavisualizations, text analytics and business intelligence. Spendanalysis is a crucial branch of data analysis that at times leans onthe Six Sigma Methodology for successful implementation.
Keywords:Data, Data Analysis, Spend Analysis, Six Sigma Methodology.
Rawdata is generally useless without the skills to analyze as data onits own is large, messy and unstructured. Following this logic,business analysts and managers often find themselves stuck with theresponsibility to conduct experiments that by nature are data drivenin an attempt to interpret data and constantly come up withinnovative on the edge data based products and services. This putspressure on companies who demand a new set of skills from theiremployees. This skill set includes the employees being ready andwilling to experiment this advocates for scientific approaches tobusiness such as composing intelligent hypothesis coupled with theprinciples of experimental testing and pollution sampling. Anotherskill required is being adept at mathematical reasoning. Thisincludes the ability to understand the proper uses of statisticalmethods. This forces some companies to only hire highly analyticalnumerate employees in all aspects of the business, complete withrigorous mathematical interviews. The final skill required is dataliteracy. An employee should be able to find, manipulate, manage andinterpret data from the numbers to the texts and even the images.These skills are relatively important for spend analysis. This paperinvestigates what importance data analysis skills hold for spendanalysis and also seeks to dig into how six sigma uncovers spendingpatterns and identifies new improvement opportunities.
Spendanalysis “is the process that integrates internal spend data andexternal supplier and market data and applies analytical andbenchmarking techniques to help identify risks and opportunities forperformance improvements and savings by applying best practices inpurchasing and supply management” (Bender,Bonalle, Lowery, & Rane, 2012).Itinvolves the collection, cleansing, classification as well as thethorough analysis of all of the expenditure data within anorganization with the aim of cutting back on the procurement costsall the while raising the levels of efficiency and monitoringcompliance. It answers three major questions what am I spending?This question shines on an organization`s expenditures curbing thewastage of resources. With whom am I spending it draws attention tothe suppliers, do they offer the best deals, do they have new areasthat the company could actively save from? Finally, am receiving whatI was promised? This opens the door to the sole purpose of having aspend analysis profit and saving opportunities.
Dataanalysis skills come in handy in the analysis of the spend analysisas seen in the four steps in procurement where spend analysis isapplied. First is to identify and collect the data. Procurementworks to identify all spend data, internal and external, for theorganization and this requires the data literacy skill. After thespend data sources are identified, the data is put together andloaded into the system software. The gathering spends data startsfrom understanding which systems that hold data needed to manufacturea whole spend record which utilizes the skill of computer literacy.The assessment of schema classification such as number, type, andusefulness all cannot occur without the proper expertise. Thecleansing, grouping, categorizing of spending data, the creation ofautomation of the data as well as the analyzing of spend data alldepend on the level of expertise of the employees confirming thatdata analysis skills are vital for the success of spend analysis.However, if the implementation of a regular spend analysis issuccessful following the employment of data analysis skills, theorganization reaps several benefits such as the elimination ofduplicate suppliers resulting in savings. Another advantage is thelowering of inventory costs and the improvement of contractcompliance following accountability which is ensured by placement ofthe spend analysis.
TheSixSigma terminology entails an examination of the fundamental ways inwhich businesses operate with the aim of discovering a better way.Its primary goal is improving the product or service a firm offers toits clients. The Six Sigma Process seeks to eradicate any and alldefects. In the business arena, “a defect refers to is anythingthat impairs the quality of a product or service could be somethingphysical such as microwaves that spontaneously catch fire or it couldbe something that went wrong during the manufacturing of themicrowaves”(Antony, & Banuelas, 2015).An example of a defect in business could be having only two nurses ina hospital of one hundred in patients. This is flawed although ratherdifficult to detect in real life. Sigma itself bears a statisticalinterpretation, referring to how far distant from perfectionsomething is. The philosophy behind Six Sigma requires everyoneinvolved to work hard aiming for nothing short of perfection therebyeradicating as many defects as one can thus making their productsand services top notch and efficient.
TheSix Sigma approach could be applied in business to spot spendingpatterns and identify opportunities for growth. Employing the use ofa Control Chart ensures the monitoring of variance or differentaspects of the business. It reveals what can occur if any variancechanges, helping to caution of any possible future glitches. Thisensures consistency of the quality and products and services beingdelivered all the while monitoring the spending patterns ofconsumers. When do they buy more and what are they no longerpurchasing? What services keep them happy and buying and what putsthem off? These are but a few of the questions a control chart helpsto answer. The Pareto Diagram technique is employed by companies toidentify and eliminate problems, therefore, increasing the efficiencyof the company allowing more room and opportunities for growth.Similarly, following the Define Measure Analyze Improve and Control(DMAIC), the process comes in handy when a company is scoping out newtarget markets in a bid to expand growth opportunities. An active useof a tree diagram enables managers to break down the company goalsinto achievable tiny segments, one goal at a time. This way if a newinvestment opportunity is not working out according to the companyexpectation, it can be stricken and more viable growth opportunitiespursued(Bender, Bonalle, Lowery, & Rane, 2012).
Budgetingand planning and product development in any given business couldgreatly benefit from taking part in a spend analysis as it ensurestransparency with organizational resources and the quality toolsensure easier management of stock. Also, the technology makes allwork easier as it becomes automated in time.
Inconclusion data analysis is a powerful tool for every company andspend analysis is vital for monitoring all expenditures, this way nocompany goes bankrupt from reckless unplanned spending. The Six SigmaMethodology, albeit unconventional, is a great philosophy businessesought to adopt.
References.
Antony,J., & Banuelas, R. (2015). Key ingredients for the effectiveimplementation of Six Sigma program. Measuringbusiness excellence,6(4),20-27.
Bender,B. C., Bonalle, D. S., Lowery, P. R., & Rane, R. (2012). U.S.Patent Application No. 13/095,529.
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