We all know analytics are important, but has it occurred to you that they are only becoming more valuable? Data allows companies to gain a better understanding of their business and it positions teams, like Procurement, to create innovative solutions to challenges that we face today and in the future.
Procurement organizations can receive significant benefits by increasing their focus more on data analytics – here are 3 examples:
- Obtain valuable market insights from the sourcing process. Supplier proposals can be a gold mine of market data such as labor rates, item pricing, volume discounts, contract exceptions, and past performance. These insights can be used to identify high quality suppliers, to benchmark future purchases, and to develop negotiation positions.
- Identify changing stakeholder requirements. Data analysis can be used to identify changing stakeholder requirements and to predict changes in their needs that may be impacted by the market’s current supply and demand. Using data to create a predictive models gives Procurement teams the power to anticipate changes in stakeholder demand, thus reducing waste and better meeting their wants and needs.
- Get the best quality products at the best possible price. Leveraging data analytics is a key method for supply chains to obtain their ever-present goal of maximizing cost-efficiency. Procurement analytics experts have the power to continuously assess real-time pricing and product availability from potential suppliers (including quality information and transportation costs).
Why is this important?
As data modeling and analytics tools become more prevalent, Procurement will need a new set of skills to leverage these capabilities. Not everyone needs to be a data scientist, but Procurement will need to know how to: interpret data, develop action plans, and make decisions based on what they see in the data. By implementing some of the ideas we discussed above, Procurement teams can start embedding analytics as a standard part of their process – your stakeholders and suppliers will thank you later!
References
Frevvo: 8 Top Procurement Technology Trends For the 21st Century
SourceToday: 5 Innovative Ways Procurement Can Use Data Analytics
Simfoni: What is Procurement Analytics? Why and how it is implemented?
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