How Real-Time data Analytics increases efficiency in the Procurement process?

Studies indicate 84% of supply chain professionals believe that digital transformation will profoundly transform the way they deliver their services over the next three to five years, whereas only 32% have developed a strategy for getting there. One of the key factors determining transformational success is data utilization.
As organizations continue to digitalize and employ modern sourcing and procurement tools that facilitate data collection and management, still many organizations continue to wrangle their data the old-fashioned way.
Through digitalization data-centric approach can now replace the legacy approach of information compilation and dissemination process that takes weeks or even months to complete.

Here are tips for procurement professionals to utilize big data analytics to develop a streamlined and efficient buying process:

1. Deriving value from sourcing processes

Collecting and analyzing data comprising vendors’ current and past performance, current market pricing, and risk assessments. Procurement teams would be in a better position to adopt a data-driven approach to awarding contracts to vendors, hence moving towards more holistic awarding as appose to traditional lowest price, existing relationship, or the so-called gut-feel approach.
Sourcing professionals can also examine logistic data to help them optimize sourcing routes and freight transporters to gain better insights on the logistic impact on the processes and develop efficient supply chain networks.

2. Identifying evolving customer demands

Data analytics can be used to identify and evaluate ever-changing customer demands by predicting changes in spend behavior and spending patterns. Insights can also be used to improve customer service and loyalty programs, to make planning and logistics more efficient, eliminate waste, error/risk, and duplicated effort throughout the organization.

3. Getting the best product and services at the best price

Given the competitive landscape, organizations are constantly pressed to become more cost-effective. Using data analytics, the procurement process continuously becomes streamlined through continuous real-time pricing and vendor data availability. Thus, gauging insights through historic order accuracy, transportation, and logistics costs. This, in turn, creates confidence among procurement teams that they are always receiving the highest-quality product available at the best price.

4. Obtaining a holistic view on spend

We live in the shared economic era where organizations are leveraging on platforms offering organizations the opportunity to combine internal procurement data assets with relevant external data assets to benchmark performance against peer groups based on real data and in real-time. This is a major shift from the legacy approach which is predominantly based on data control and data hoarding.

5. Consolidating unstructured data

Unstructured data constitutes text files (word processing, spreadsheets, and presentation), email, and social media. Unstructured data is regarded as an untapped goldmine for current procurement processes. According to published research, visualizing social media data related to a vendor, for example, gives buyers timely insights into their purchase decisions. Efficient data implementation also allows organizations to monitor strategy implementations and allow for adjustments to increase success rates.