In the modern business world, data is quite possibly the most valuable asset an organisation can have, and when it comes to procurement, reliable, accurate and up-to-date data is key to successful strategic work. “But does everyone know how to analyse data and discover what exactly is happening in the business?” commented Maistro.
Data can provide an organisation with a lot of information, the insights depict the activities of an organisation, their suppliers, and how the market is operating. Most basic systems can provide details on spend, total costs, savings etc. But more advanced systems can show supplier types, how much is being spent in each category.
While the need to manage risk song the supply chain is not a new challenge, the impact of recent events such as COVID-19, BREXIT, trade wars etc. organisations are also ramping up their investment in solutions that harnesses data to identify possible risks along the supply chain, as well as future trends and market forecasts.
“But what procurement does with the data is what really matters,” commented Maistro. “When spotting spending patterns and repetitive behaviours, taking a step back to analyse why it's happening is really important – it's normally around processes and spending that have always [been] done in the same way, so no one pays attention to them, that the best opportunities can be hidden. It's the chance to change the process, find a new supplier and do things differently to save costs.”
How can organisations keep data clean and accurate?
When it comes to keeping data clean and accurate, Maistro identifies four elements known as ‘the COAT principle’ which makes sure that data is:
- Consistent and in the same format, making it much easier to analyse. “Using the same labels and classification will ensure that everyone is looking at the exact same data.”
- Organised. “If the information is all over the place, it becomes almost impossible to find anything and take insights out of it.”
- Accurate in order to make the right decisions. “ It's important to take the data only from the right sources and ensure that the right people will have the power to change it.”
- Trustworthy. “If significant decisions will be made out of the information available to procurement and the company itself, they need to be able to trust the data.”
The benefits of data-driven sourcing and procurement
In an increasingly complex and data-driven world, procurement needs to harness data-driven strategies to provide them with insights in order to remain competitive.
Knowledge is power and for procurement leaders, actionable data can provide multiple benefits for the wider organisation, including:
- Overall cost savings
- Stronger supplier relationships
- Improved internal and external collaboration
- More accurate demand forecasting
- Increased efficiency
- Safer risk and compliance management
- Supply chain transparency and visibility