Procurement teams are often hard-pressed to increase efficiency and streamline processes while identifying cost reduction opportunities within direct and indirect spend. To be successful, organisations need to adopt a data-driven approach and embrace the power that robust data analytics can bring.
Data-led decision making, and data-driven projects have become core strategic assets in most organisations; evaluating appropriate data is no longer an option, it’s a necessity. However, vast amounts of data can become overwhelming and complex, making it difficult for organisations to manage and analyse. Siloed data storage, poor data quality and the time and cost of business intelligence (BI) – centralising, cleansing and managing disparate datasets – requires technical expertise to ensure business continuity and growth.
Developing best practices
In order to address these challenges, you must first determine what your business goals are; from increased revenue, sustainability, cost reduction, to service improvement - identifying these will direct you to the correct data sources.
Another consideration is the size of your organisation – while large organisations may require a team of data warehousing and BI experts building data lakes, smaller or medium-sized organisations may be better suited to a lower cost approach. For example, the integration of a SQL server with no-code apps and data visualisation dashboards still provides the key insights required for strategic decision-making.
Improvement of data quality can also be achieved through a review of the data input processes and guidance. Data science and machine learning can be used to improve or enrich data quality, for example, with predictive classification or the integration of public data sources. No matter where your data is in its lifecycle, improving its quality is a long-term process that will eventually lead to better decisions and outcomes.
Sustainable data: pursuing net-zero
According to McKinsey Global Institute, data-driven organisations are 19 times more likely to be profitable, with businesses using big data citing an 8% increase in profits and 10% reduction in their costs. In procurement, having access to high quality data is vital when it comes to strategic sourcing. Being able to report on your contract spend and see your achieved cost savings is fairly commonplace, but there is a growing requirement to have further visibility on non-compliance, upcoming contracts, full category oversight and supplier risk analysis as well. In parallel, procurement teams are under increasing pressure to not only provide cost-efficiencies, but to also drive and positively impact environmental, social and governance (ESG) issues.
With the government's net zero emission targets in place, companies need accurate data insights to understand their position, as well as plan and track their progress. To reach net zero, you have to take into account emissions from across the whole supply chain - your own carbon footprint, emissions from purchased energy, and those from suppliers and end users.
Access to quality and purposeful data remains invaluable; it minimises risks within supply chains, reduces costs through consolidated expenditure opportunities, enables efficiency and provides the visibility required to achieve sustainability within the value chain.
To discuss how to use and integrate quality data into your procurement cycle, please contact us at email@example.com.
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