Procurement Analytics- Empowering the Future of Procurement
Advanced analytics provides data-driven insight and power that procurement can leverage to make impactful business decisions. For organizations that are yet to tap this value, it is time to make the move and gear up for a future when big data will be the deciding word.
The power of procurement was overlooked for long subjecting it to tactical activities. But today, Procurement teams are calling the shots and making the most important business decisions. We know that for any good decision, quality data plays a major role. But how can procurement be sure that their guiding data is the best? This is where advanced analytics come to force. Through advanced analytics, procurement earns a grip on spend by analyzing various data sets and resources. While data is processed for quality, advanced analytics helps manage suppliers through track performance reports, POS data, customer grievances, deliveries, and more. A conservative outlook may refute this as something regular spend-analysis has already been providing. For them, it is important to note that it is only with advanced analytics technology that a business can predict market demand, availability of resources, and design intelligent procurement strategies.
An important aspect of advance analytics is its transformational impact on how business leaders will manage their supply chains. Good analytics will support procurement leaders to give their best in terms of planning purchase timing, and keeping an eye on inventories to ensure steady supply for manufacturing and/or consumer demand schedules. This certainly includes identifying cost savings and taking measures against foreseeable threats to business. This will empower procurement and convert the function as a strategic limb for better business outcome.
Below discussed are some of the areas to directly benefit from advanced analytics-
- Market Intelligence: Advanced analytics will take global supply and demand data into account to offer real-time recommendations for procurement to champion its business objectives.
- Risk Mitigation: Advanced analytics will study global events and their impact on supply chain to shield procurement against any kind of risk.
- Pricing Optimization: Under the pretext of profitability, price optimization is a feature of advanced analytics. It takes into account the supply-demand environment, global & regional economic conditions, and seasonal price change and helps buyer negotiate better.
- Vendor Selection: Advanced analytics powered by AI helps analyze vendor data to produce vendor scorecards suitable for recognizing high performing suppliers, build lasting relationship, and remove the non-performers.
The scope of this discussion cannot be limited to this short article and hence we developed a whitepaper discussing the subject in details. The whitepaper explores the role of analytics in procurement starting from its genesis to its scope (partly discussed above) to its future ambitions.
As the old skin of procurement slough off, there are newer challenges that it must be able to tackle in terms of decision making. And to achieve this, the role of analytics is indispensable. For any efficient purchasing process, analytics is the key platform enabling organizations tremendous visibility into their procurement functions and yield more than traditional spend reduction. Having said this, building in-house analytics capabilities requires organizations to be mindful of time, money, and other resources to be invested. To skip this arduous process, it is recommended to go for an expert. The only way for procurement organizations to stay relevant is to latch itself with this fast pace evolution in analytics.
🔒This is a limited preview of a whitepaper. Visit here to download it.