One of the most important Procurement capabilities is analytics, from spend analysis to savings tracking, it enables the Procurement function to create transparency that ensures value capture and avoid value leakage. Advanced analytics should provide Procurement Done Right professionals with actionable insight and foresight.
Procurement Needs to Handle Multiple Data Sources
The Procurement function has been challenged with lots of distributed data sets with several different key data sources that needs to be combined such as Account Payable data, Contract Management, Sales forecasts, Third party data and Supplier data.
Artificial Intelligence and Robots Within Procurement
The development of advanced analytics offers greatly needed solutions for the Procurement function. Increased digitalization creates enormous volumes of data for procurement from invoices, purchase orders, supplier contracts and supplier performance KPIs. Artificial intelligence (AI) can support with classification, clustering and cleansing of data. These AI functions combined with Robots (BOTS) enables tasks as predictions & simulations, consistency & compliance and process mining of Procurement related data.
Examples of Procurement Analytics
- Spend analytics – Answer to questions like: What do we buy? From whom do we buy? Who is buying?
- Contract analytics – Analytics regarding supplier contracts addressing compliance to contracts, contract length, contract risks and payment days
- Supplier analytics – Analysis of the supplier base and specific suppliers’ performance, risk, diversity and sustainability
- Savings lifecycle analytics
- Spend forecasting – Forecasting on future spend
- Procurement benchmarking – Benchmarking of different Procurement related KPIs regarding strategy, organization and processes