Digitalisation: Deliver game-changing spend analytics & actionable insight
The Digitalisation of Procurement: Overcoming the data quality challenge to deliver game-changing spend analytics and actionable insight
Digitalisation is the use of digital technologies and digitised data to impact how work gets done, transform how customers and companies engage and interact. For procurement, operational improvement depends on the ability to maximise the value of digital tools. These have the capability to inform improved procurement decisions, manage risk and identify areas of opportunity, especially when these tools can combine internal and external data.
Spend Analytics is the first step on a five-step journey and one which changes the game for procurement.
However, according to The Hackett Group, there are still a high proportion of organisations that only have access to very limited spend-by-supplier information. Surprisingly, only 40% of global companies have basic information available company-wide.
Advances in analytics and information management opens up a new world of insight and decision-making ability. Traditionally, data exists in silos, isolated by different technologies and systems. Furthermore, it is difficult to extract and principally geared to accounting rather than pro-active procurement. Now, digital tools such as ProIntell provide organisations with the ability to extract, consolidate, categorise and rapidly visualise data, company-wide, and then to augment and enrich the analysis with external data sources to allow for deep insight and actionable intelligence.
In the most recent Deloitte CPO Survey, which we recommend reading (there is a link at the bottom of the article), analytics is the technology area that CPOs consider will have the greatest impact on their businesses in the next two years. So, what is stopping them?
Most CPOs cited poor data quality, lack of standardisation and governance issues as the biggest challenges. Another significant challenge was the inability to generate analytics and insight.
The results indicate a lack of understanding of what is required to deliver spend analytics. The biggest pitfall for organisations is believing that buying a software package is all that is required. This explains the other intriguing result of the survey that 54% of organisations were not satisfied with the results that their spend analysis technology delivered.
Our experience backs this up. We see organisations struggling to collate and combine data sets from;
- Multiple source systems, in different formats with different accounting structures
- Multiple business units, with different stakeholders and extraction requirements
- Multiple geographies, with different languages and currencies
It is no surprise that organisations fail and software investments yield little or nothing at all.
The key to the delivery of high-quality spend analytics is understanding that it is a structured data transformation process which produces quality data which can then be leveraged using visualisation software to allow for analysis and insight.
The Procura approach has five stages, from data cleansing and categorisation through visualisation, enrichment, refresh and insight.
The process is consultant led and managed. We map all data sources, co-ordinate extraction, manage collation and deliver the cleansing and validation.
In the second step, analytics is customised for each client. Every organisation is different and to make spend analysis truly insightful, data, dashboards and analysis need to be customised to suit.
Enrichment and augmentation of data then takes analysis to a different level. Augmenting spend data with other client data (such as financial, operations, quality and delivery insight) and leveraging external supplier and market information provides game-changing insight.
The hard work happens the first time. Having set the extraction process, data categorisation and mapping, refresh is straightforward, keeping data live and up-to-date.
An external view can often add value with expert input and advice able to identify opportunities and provide guidance.
It’s not about the software, it’s all about insight
- Leveraging leading-edge visualisation software (such as PowerBI or Tableau) has several advantages.
- Firstly, it’s quick. Many organisations utilise these tools already, and overlaying spend analysis onto existing licences and security makes for an easy and quick start. If an organisation doesn’t already have these within its IT stack, cloud-access options are straightforward.
- Secondly, it’s powerful. Visualisation allows for deep insight.
- Finally, it’s customisable, allowing analysis and dashboards to be tailored for each client’s requirements.
For more information or to see a video summary of ProIntell click here
Points to consider
- The first step to digital procurement is spend analytics
- Spend analysis has the power to provide a step-change in procurement decision-making, risk management and opportunity identification
- The biggest challenge is data quality, but with the right approach and expertise, it is readily achievable
- Poor data can be transformed into high-quality analytics and actionable insight through a structured process.
- It’s not about software, it’s all about insight
If you would like to take address these points, we can deliver your spend analytics, set you up on our leading-edge platform and provide spend intelligence to guide your teams. To speak with one of our experts please contact us.
Email us: email@example.com
Call us: +44 (0)203 693 7275