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Procurement: Big Picture v Whole Picture

When working with Clients on building a Solution, the most frequently asked question is, 'How is this actually going to work and make things better?'  This is the point at which the room goes quiet and I have to sell the vision; a different piece from the concept...which Experts and the Data and Tech press have iterated exceedingly well, better than most vendors actually.

And yet, there is still some way to go in leveraging the full financial value of Data, and this is mainly due to the fact that until recently we most of us have actually been working with it, albeit in a no frills, limiting, dispassionate way. So what we are actually asking for is a 'cultural overhaul' in the way we approach and apply it now that the technology has come of age...and this is where brains start to explode, because Clients suddenly realise...'It's all connected'.

The second you start using one set of Data, you quickly realise you need another set to fill in the gaps [usually from another business unit], and then another set to link it [what I call connectives], and then another to augment it, and so forth. I call this bit the moment where all the dots that are invisible to the eye, become visible.

And so it comes as no surprise that Procurement is seeing some of the most significant advantages first. And I love this, because it just demonstrates how 'stuff works'.

Procurement Analytics are now fundamental to the ongoing management of sourcing and handling of market pressures.

Overarching Corporate KPIs now include Procurement, increasing engagement from Senior Teams across the business. In this context, training and employee development has become as much a part of the picture as managing the Procurement Pipeline.

Cross-function and Collaboration capability through Data strategizes Procurement Departments and Staff to not only engage with non-procurement departments like Production and Quality Management but factor in impact on other functions like Sales and Marketing…with an emphasis on Resource Management. This naturally links with Finance, Logistics and Supply chain through top-down data connectivity.

The Growth Factor

Procurement as a function is now ‘Integrated’ rather than ‘Serving’. When we look into major global corporations’ profit and loss accounts material costs and purchased services are becoming more and more visible; comparatively. These complex financial ratios for many companies with tightly governed growth and product development strategies are the success factors reliant on Procurement Capability.

With Suppliers pushing back in the market place (e.g. on payment terms, deliverables, & SLAs), the need to measure, monitor and manage Procurement/Sourcing Activities and Events is heightened. The added pressure of developing internal knowledge and skills means Analytics Tools are necessary to help develop the entrepreneurial mind-set that bridges supplier to company interests and innovation. These are crucial to providing insightful BI that gives Procurement Staff the opportunity to broaden their spectrum of skills and strengthen their know-how of the market place.

This Cross Functional purchasing brings the bottom and top line commercial value Procurement is often overlooked for, noted usually only for; cost improvement, reduction, value ratios, terms, payment schedules.

Working Smarter with Sharper Data Driven Insight

Sharing and analyzing key performance data can support Directors and Managers in making decisions that increase ROI [internally and externally].  Being able to cleanse the rubbish from Data, and Slice and Dice Spend by any dimension from GL to Business Unit, create enriched views showing Spend Classifications and Categories; Compliance, Supplier Profiling, Sector Clusters, Duplication, Multi-site Commonality, Resources, Production, Capital, Supplier Contracts to name a few, starts to build the commercial Procurement Story.

So in answer to the Question How and What? 

Increasing the opportunity to grow and innovate business through tracked activity, internal and external sector knowledge, patterns and trends can only be good thing.

Analytics help innovate world class purchase management processes, making departments pro-active rather than reactive and better positioned to improve incumbent processes that hinder innovation and ‘true’ profitability.

Views: 675

Tags: #Analytics, #BI, #Data, #DataConnectivity, #Procurement

Comment by amulya anoj on May 8, 2015 at 4:30am

A very comprehensive one. Analytics is a need in the world of business now. To know how businesses are transformed through big data analytics visit Monetize business through big data analytics.

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