Population and comparisons in procurement data

When to use absolute numbers VS ratios and percentages

When looking to compare different types of procurement data, it is important to consider the context of the data. One key consideration is whether you are comparing absolute numbers or ratios and percentages. Knowing about absolute numbers versus ratios and percentages is important when comparing procurement data because it helps you to interpret the data in a meaningful way.

Comparing Absolute Numbers

When comparing absolute numbers, you are looking at the actual amounts spent, number of purchases made, or quantity of goods or services procured.

This type of comparison is useful for understanding the overall scale of procurement activity between different populations. For example, if one department has a much higher total spend than another department, this could indicate that the first department is procuring more goods or services overall. However, absolute numbers can be misleading if you are comparing populations of different sizes.

For example, if one department has 100 employees and another department has 10 employees, it would be expected that the first department would have a higher total spend simply because there are more people to procure goods or services for. In this case, it might be more appropriate to compare ratios or percentages. VS

Comparing Rations or Percentages

If you are comparing ratios or percentages, you are looking at the proportion of procurement activity relative to some other measure, such as the size of the population, the budget allocated, or the number of projects undertaken. This type of comparison can help to standardise the data and account for differences in population size or budget allocation.

For example, let's say there are two departments: Department A and Department B. Department A has a budget of R1,000,000 and they spend R100,000 on procurement, which is 10% of their budget. Department B has a budget of R1,000,000 and they spend R200,000 on procurement, which is 20% of their budget.

Looking at the percentages alone, we can see that Department B is spending twice as much on procurement as Department A, which might indicate that they're prioritizing procurement more heavily.

However, it's important to be aware of the limitations of ratios and percentages. For example, if Department A spent R10,000 on procurement, and Department B spent R9000 on procurement, the difference in spending between the two departments is not very big (R1000). But if we compare their spending using ratios and percentages, the difference seems much larger. In this case, the ratio of Department A's spending to Department B's spending is 10:9, of 10% more,

Remember when comparing procurement data, it is so important to consider the context of the data and choose the appropriate method of comparison. Absolute numbers can be useful for understanding overall scale, but can be misleading if populations are different sizes. Ratios and percentages can help to standardize the data, but can be sensitive to small changes in absolute numbers.