Without a doubt, procurement organisations are constantly on the lookout to reduce costs and improve category management. However, boosting various source-to-pay processes to support the larger goals of the organisation is also an extremely important priority. While organisations look at automation, collaboration and several other strategies to boost the value and influence of procurement, the most effective way to improve performance is through spend analytics and strategies that make use of data.
The power of spend analytics
Spend analytics allow procurement organisations to access and utilise key data to their advantage. Automated analytics tools, for example, help them to evaluate historical spend data that can be segregated by the region, category and supplier. Armed with vast volumes of data, procurement professionals can aggregate, categorise, cleanse and distil spend data to inform their future decisions.
Spend intelligence enables procurement professionals to get in-depth information about sourcing behaviours so that they can change them for the better. They can look at things like sourcing more categories from a specific supplier, ensuring internal contract compliance and taking up initiatives to support optimal supplier performance management.
Benefits of using automated spend analytics tools
When you have big data at your disposal, it provides greater spend visibility. Based on this information, you can make a number of improvements for different stakeholders.
Identifying saving opportunities: Using automated tools for spend analytics means that you can identify saving opportunities. It is important to note that these opportunities may not boost business performance, but it can increase the chances of success.
Building smart procurement team: Automated spend analytics tools work to provide information to procurement professionals so that they can make informed and profitable sourcing decisions. They can use historical spend information to current organisational needs and market conditions and figure out the best course of action.
Improved supplier management: Automated tools for spend analytics also allow organisations to club their suppliers based on category, volume, spend and strategic importance. This, in turn, helps to improve supplier management and also allows CPOs to decide which suppliers they should hold onto and the ones that can be offloaded.
The bottom line
If you are not using automated tools to analyse spend analytics, you are at a disadvantage. The information that such tools provide is invaluable for procurement teams as they help to reduce costs and improve procurement efficiency and performance.
Ed founded Odesma in 2014 with the explicit intent of creating a new kind of procurement consultancy founded entirely on cloud principles. Deploying best-of-breed subject matter experts alongside the best on demand technology to deliver rapid and effective change for customers.