31 January 2017
The importance of procurement analytics to meet business KPIs
A recent survey conducted by Capita in conjunction with Exec Survey, highlighted that procurement departments are still in early stages of adopting procurement analytics technology in order to measure and improve their processes and spend KPIs.
The recent Exec Survey ‘Finance and Procurement: Transformation Challenges’, conducted on behalf of Capita integrated business solutions, looks at how digital transformation can change the way in which organisations approach procurement today.
The report shows that organisations find themselves at various stages of their digital journey to mobile adoption, applied analytics and process automation. However, the findings also highlighted that leading organisations such as BT, Grant Thornton, Nestlé and Rolls Royce agree that innovative technology is needed to allow finance and procurement departments to have maximum business impact.
Today’s procurement challenges:
While the survey respondents agreed on their top three procurement KPIs – 60% voted ‘Value of supplier spend by purchasing category’ as the most important, followed by ‘Unpaid invoices by age’ (42%) and ‘Number of supplier invoices paid on time’ (40%) – the tools to measure those KPIs are not a reality for most.
When asked what their biggest procurement challenges currently are, 60% said they feel that they do not have sufﬁcient tools in place to measure procurement efﬁciency. Following shortly behind, 56% said they are unable to conduct reliable analytics and identify exceptions to their process.
This highlights one of the key issues of the complex procurement process which often involves strings of inefficient procedures that, without tools in place to measure the overall procurement efficiency, will go unnoticed. Visibility, or lack of, remains a big challenge for procurement professionals – 35% of participants told us that their current system does not provide them with the ability to measure procurement analytics, and 19% are still using procurement systems that are predominantly paper based.
Procurement professionals can play a key role in adding value to the business, but in order to deliver greater business efficiencies and increased savings, insight into the following is crucial:
- What are you spending money on and with whom
- Variations in pricing, contract terms and service levels
- Potential ‘leakage’ of savings
- Invoice input or payment methods that hamper your department's efficiency
- Process bottlenecks which could result in unapproved orders, invoices or late payments
Integra, Capita’s purchase-to-pay solution:
Web-based and scalable to meet the requirements of organisations from SMEs through to large corporates, Integra can provide in-depth reports and dashboards on all purchasing, invoicing and payment activity. Ready to go reporting packs give real time analytical data on your procurement activities to enable immediate action to be taken for improved efficiencies and performance.
Integra has helped many organisations re-invent their procurement division. Supporting the full purchase-to-pay cycle, shopping basket style requisitioning combined with cutting-edge technology such as mobile data access provides an efficient alternative to traditional manual, error prone solutions.
- transparency on all purchasing activity from requisition to invoice to payment
- supports and empowers a proactive procurement savings strategy
- fully automated and mobile accessible tasks and workflows
- saves time, money and resources
- informed decision making and more accurate financial planning.