Procurement leaders are well aware that new technologies are merely beginning to impact their daily tasks and performance. The arrival of new technological breakthroughs, fueled by an explosion of data, is a blessing in disguise. In a highly competitive world, organizations need actionable insights from their data to improve performance. It’s especially critical when it comes to the procurement organization.
Procurement professionals are already surrounded by a tremendous amount of data both visible and hidden. Organizations are just now beginning to tap into to impact the business in ways it couldn’t before. We recently developed tools to bring together both internal and external data, allowing the organization to have access to new insights. These new insights are useful to maximize savings and minimize risk throughout the supply chain (i.e. from supplier to customer).
By applying analytics, combined with data visualization techniques, and bringing external data to the millions of data points they already have, Procurement professionals are given the chance to make way for better business decisions. Today, due to the cost of gathering, cleansing and visualizing data, most procurement professionals only use a set of very simplified data to produce very basic analytics. As a consequence, a lot of potentially valuable insights get lost in the process. In this context, advanced analytics represent a game changer through this ability to build bridges between big data and actionable insights. The convergence of both Procurement and Sales data could give birth to valuable and exclusive insights. For instance, reaching a certain level of sales on a given product could trigger an alert in the procurement dashboard or give recommendations on how to renegotiate certain deals based on products performance. This idea of bringing together and finding a pattern within data that are not apparently related is also valuable in the context of spend analysis, financial execution, and budget forecasting. The synergy between these three can be improved and a lot of time could be saved. Once again, Procurement could benefit from this.
Another concrete example would be about sourcing. Besides having a better overview of potential risks associated with a given supplier based on the analysis of both internal and external data about him (country risk, news, financial situation, …), Procurement professionals could leverage data to identify best providers per category without even having to go through an endless list of providers… let the data find them for you.
Despite our positive experience with current partners, we noticed that most organization still struggle to deploy more advanced analytics features to transform the Procurement department.
Our experience tells us that many are just beginning the analytics journey. Adopting a very cautious and slow strategy might be tempting but also risky based on how fast the market and technology are evolving. It would be a bad idea to let your competitors have access to unique insights before your organization.
Having better analytics can impact your S2C and P2P processes in many ways. For procurement departments, information is an asset. Insights extracted from historical data on product pricing, providers or external data source can strengthen Procurement professionals’ negotiating position and lead to better pricing. Few procurement functions are currently making the best use of the huge amounts of data they generate. However, based on our experience, we highly recommend organizations to first define and prioritize the issue they want to solve.
Through the help of specialists, you will determine the types of data you need as well as the type of analytics required to generate the appropriate insights to be featured in your dashboard. This same interface must be personalized to fit your needs and specific elements of your business. A simplified visualization of multiple sources (both internal and external data).
A simplified visualization of multiple data sources (both internal and external data sources)
We have developed a solution that presents a holistic view that combines both internal and external data (market information, etc.), through APIs and Open Data database. Moreover, the information is easy to understand thanks to data visualization techniques. Indeed, having access to more information is one thing but you need to be able to understand it, hence the importance of this technology. Thanks to this tool, procurement professionals can start to leverage diagnostic, predictive, and, soon, prescriptive. Advanced interface with personalized KPIs
Advanced KPIs with personalized KPIs
We noticed that many organizations are having issues with data since most of it remains inaccessible or hidden because procurement teams don’t have access to it, struggle or don’t know how to use it.
We believe that organizations should focus on increasing the maturity of their analytics capabilities through advanced decision-making tools.
Our experience indicates that advanced analytics projects have a payback period of less than a year.
The AI upcoming revolution
Having updated analytics-based decision-making tools will help your organization integrate AI in a seamless way later on. Indeed, AI will impact both data interpretation and visualization. Predictive analytics will be boosted through Machine Learning and Natural Language Processing techniques, both are AI fields. The goal is to provide insights on a high volume, at high speed and to a large diversity of possibly relevant data. With AI, we envision decision-making tools to go further than just presenting insights. It will enable procurement professionals to have access to new exclusive insights and predict the outcome of certain potential business decisions. The use of specific algorithms shall also enable decision-making tools the capacity to give hyper-personalized recommendations. In a close future, we also expect decision-making tools to help automate most P2P & S2C tasks.
At CKS, we build our solutions with the idea that very soon, next-generation AI-powered augmented analytics will automatically prepare and cleanse data, find key insights and hidden patterns. While keeping in mind that automation will simplify procurement professionals’ routines. The relative maturity of such solutions enables us to deliver tailored-made solutions faster (3 months on average to set up a personalized solution) and cheaper (the usual cost of procurement related software can be divided by 3 compared to old technologies). Furthermore, technology allows us to go further than ever before in terms of what’s possible for Procurement teams.
It goes without saying that early adopters of augmented analytics will have a competitive advantage. No matter where you are in your analytics journey, enhancing your analytics tools will help you dramatically improve procurement’s performance and enhance the organization’s strategic impact on the business.