UNSPSC (United Nations Standard Products and Services Code) is a comprehensive hierarchical classification of products and services designed for e-commerce and e-procurement systems. UNSPSC is used by both private companies and the public sector in countries around the world. It is a universal, non-proprietary system that is freely available on the internet. UNSPSC coding is independently managed and frequently updated with contributions made by industry specialists around the world.

Most Spend Analysis providers make it a standard to classify all spend data to UNSPSC. But UNSPSC often is not the right fit for category managers trying to run sourcing events. UNSPSC is a global commodity structure where you can classify livestock to surface to guidance missiles. There are 40,000+ codes within UNSPSC and depending on what the customer is trying to accomplish, UNSPSC coding and classifications may or may not be needed at all, depending on their business usage and needs for strategic sourcing. What drives the decision process is what the client is trying to get out of their Spend Analysis solution. There have been clients where all they want is for is to tell them where they are spending money at a very high level, using their business sourcing categories. Others want to classify using UNSPSC to categorize all of their detailed spend down to the grade of pencils they are buying from office supplies suppliers. UNSPSC coding is not mandatory for businesses however; it has its own advantages that can help your business and strategic decisions in many ways.