Procurement and strategic sourcing may be in for a shake-up through the introduction of digital technologies, as well as through the application of data-driven insight. Together they will help to improve purchasing performance as well as contribute to the realisation of wider business goals.
New analytical tools are enabling procurement teams to increase their productivity and performance. Whilst also realizing cost savings during supplier negotiations. Both of which are vital to the continued development of the procurement function.
Here are five critical steps to help ensure constructive adoption of data-driven technology that add value and benefit the whole business.
1. Recognise the significant impact of improved procurement through technology focused on:
- Controlling costs
- Improving efficiency
- Managing risk
2. Understand the problems that effective and quality data technology needs to solve:
- Quality of information
- Time as a resource
- Consistency of analysis
- Independence of insight
3. In a complex and volatile world sourcing quality data and analysis, and deciding how to use it is vital:
- Go for quality over quantity: It’s not simply about more data, just as important is the way you acquire and analyze the data to obtain actionable insight.
4. Data Application means more time using the data effectively (rather than gathering the
data). This means strategy can be tightened through reliable and independent data-driven technology, including for:
- Analysing insight
- Spend and trend analysis
- Costs models for finished goods
- Smarter negotiations
- Integrated workflows
- Ability to develop scenarios and forecasts
- Benchmarking performance
- Profit Improvement Planning
- Data integration into all aspects of buying and selling
5. Measure your success through the effective use of data-driven technology to show that procurement can:
- Work more efficiently
- Be more profitable
- Better ensure stable business models
- Achieve consistently higher margins
- Respond to sustainability and ethical demands