Transcending Spend Analysis: Supplier and Commodity information as key drivers to spend management
It has been well documented how the role of procurement has drastically shifted in the past decade. The questions, that CPOs today face, are far removed from those that they faced, even five years ago. With the supply base for almost all organizations having gone global, the measurement of procurement efficiency is not just the amount of cost reduction achieved. Also with a global supply base come the challenges of ensuring seamless supply in the face of new challenges like economic and political differences or even geographical catastrophes.
Rather than making things more difficult these challenges can be looked at as an opportunity for procurement departments to replace cost reduction as an aim and instead focus towards value addition. As the economy moves towards recovery from the events of the last couple of years, procurement needs to look at becoming more pro-active to issues and challenges that it might face compared to being the fire fighting, reactive approach that it generally resorts to.
The infusion of technology like spend analysis, e-sourcing and others has to be supplemented with market intelligence and analytics to ensure that procurement moves beyond the role of a buyer and becomes a business advisor, adding strategic value to the organization.