Data analytics has been the buzzword in the procurement industry for years, yet there are still many organisations that can’t articulate precisely what it can do for them. Not only has this prevented them from developing their data analysis capabilities, but it’s also meant that those companies who truly benefit from analytics are the exception, not the rule.
And the benefits are profound. When procurement officers are asked to describe nirvana, the answer is universal: data organised in such a way that allows for useful and actionable insights. This is what advanced data analytics provides. Without it, crucial data remains locked in siloes: purchase orders in the procure-to-pay system, invoices in the financial system, contracts in the CRM system.
Right now, procurement managers on big salaries are spending hours upon hours trawling through data instead of spending that time gleaning strategic insights form it. Organisations need to strengthen their analytics capabilities if they want to get the most out of their data and their employees.
The biggest obstacle for organisations trying to develop their data analytics capabilities is the belief that they have to do it all. The best form of implementation and development calls for a good balance of outsourcing and insourcing.
No company can develop competitive data analytics entirely on their own; it requires a broad range of highly-developed skills and experience. With a finite budget, companies need to focus on what they do best and outsource the rest.
Right now, there are software platforms available that can:
Cleanse your data: worldwide, the quality of data is not good enough to allow for useful insights. Platforms such as ProcureTrak can cleanse data, correcting manual-entry errors, miscalculations and a host of other errors that are clouding quality analysis.
Categorise your data: An effective categorisation schema is absolutely crucial when moving towards data-driven decision making. Without it, organisations rely on gut feels and rule of thumb. ProcureTrak makes use of machine learning techniques and extensive rule sets to categories data, whether an organisation is using industry standard schema such as UNSPC, their own or a hybrid.
Data Visualisation: The ability to explain the benefits of data is non-existent without some form of visualisation. Once the data has been cleansed and categories, it needs to be visualised in a manner that’s easily consumable by those who aren’t data-savvy. This is precisely what platforms like ProcureTrak do. With a range of dashboard suites, users without a technical background can easily access relevant data and gain the insights they need to make the right calls.
Solutions like ProcureTrak are available right now, and capable of performing a lot of tasks that are currently holding up human workers. For instance, these platforms can read a company’s financial data and sort it into the relevant procurement sourcing groups. It can go further, developing category strategy based on market knowledge and spend data.
Good data analytics is about horses for courses – get the software doing what it does best to free up the humans to do what they do best.
The benefit of developing core analytical skills within your procurement team is twofold.
The first is obvious. Data analytics is the now and the future of procurement, so workers keen on making themselves invaluable to their organisation would be smart to hone their skills in this area. Robotic process automation, AI and machine learning can do a lot, but not all.
The data, cleansed and organised, still needs to be interpreted and used to influence better outcomes within negotiations or bring stakeholders on board. It can be used for tender response analytics and commercial analysis on vendors. The point is, it still has to be used, and the procurement officers most adept at working within the digital procurement sphere will be the most valuable.
Secondly, familiarising yourself with digital procurement analysis makes it easier for you to explain its benefits to management. Talking about data analysis, AI and machine learning intelligently can dispel its aura of impenetrability for those not technologically comfortable. This is a remarkably useful ability when presenting to management or stakeholders, whether they’re internal or vendors.
Academy of Procurement offers a range of digital procurement online courses, covering everything from AI, machine learning and robotic process automation to blockchain, descriptive analytics, the internet of things and guided buying. Get the digital literacy that can take your organisation and your career to the next level.
Once these skills have been honed, don’t leave them sitting on the bench while your employees trawl through hours upon hours of data. Get the grunt work done by cutting edge software with Purchasing Index’s Data Analytics.