What is taxonomy?
The term taxonomy means a process of classification. Taxonomy offers a simple solution for you to preserve, retrieve, and search the data. It is the foundation stone of the information architecture of each organization.
Taxonomy is a crucial component of the spend analysis process and is often hierarchical in structure with various classification levels.
It is the backbone of an organization’s information architecture and helps companies store, retrieve, and distribute large amounts of data. Using taxonomy, an organization can identify its level of spending to the most granular level.
The categories in the taxonomy assist businesses in understanding where they are spending their money, how much they are paying to whom, and where they can make cost savings.
All levels of management should understand the categories within the organization. There should be no room for confusion.
Many taxonomies are used in today’s businesses, like supply chain, project management, data taxonomy, etc. These taxonomies help companies to make informed decisions.
