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What are Procurement Analytics?

Procurement Value Measurement A Spotlight Report from The Hackett Group

What are Procurement Analytics?

Procurement analytics is the process of tapping into the large reservoir of procurement
data using quantitative and analytical methods to develop a set of actionable insights to
drive value and improve operations. This is accomplished by collecting the
procurement data from across various sources, classifying the data to standard or user-
defined parameters and presenting in a visualization that allows the data to be
consumed by decision-makers. This is where many of the key decision processes
break down and fail to yield the requisite benefit. Many organizations are unable to
aggregate and analyze this data due to the lack of tools and systems to performs these
analytics.

 

 

Finding Value in Procurement Analytics

Sourcing screenshot of ivalua platform - Strategic Sourcing Solutions

Analytics within Procurement is not a new concept for organizations.   Many organizations have been using Procurement Analytics in one form or another for many years.  These organizations have long recognized the value of these analytics, but this recognition has traditionally been limited to just Spend Analytics and have been viewed as something that is only used by Procurement Professionals.  However, the power of Procurement Analytics extends far beyond just spend and into all parts of the Source-to-Pay (S2P) process, and organizations are taking notice of the depth of the analytics available to support business decisions at all levels.

 

 

Procurement Analytics Provide Critical & Actionable Data

The data that can be used to support analytics is pervasive throughout the S2P process and can be used to support a variety of decisions from Strategic Sourcing, Contract Management, all the way to transactional Procurement.  The following are just some of the areas where Procurement Analytics can impact key parts of the S2P process.

Procurement Analytics can be a key factor in limiting risk or evaluative performance with your suppliers. During the supplier onboarding process, analytics can be used to aggregate risk data so individuals can determine if a supplier is a risk long before they get their first purchase order. The best way to mitigate risk or detect declining performance is to have analytics at your fingertips

Regarding Strategic Sourcing, Procurement Analytics can be used to segment spend across commodities, geographies, and entities to identify opportunities to generate savings and value. These same analytics can help identify key triggers to engage in a sourcing event. This includes information on a supplier’s risk, quality, and performance profile, as well as information on buying patterns or demand forecasts.

Beyond being used to identify savings prior to and during sourcing events, Procurement Analytics from transactional Procurement, invoices, and contracts can be used to identify maverick spend that could be eroding savings earned during the Sourcing process and introducing risk into the Procurement Process.

Procurement Analytics can also generate significant value for the transactional aspects of Procurement.  These analytics can measure purchase order cycle times, bottlenecks, and can be used to study and recommend savings and cash flow improvements associated with payment terms. With Procurement Analytics, users can evaluate the accuracy of payments, monitor for duplicate payments or fraud, and evaluate discount opportunities.

Procurement Analytics – The Data Challenge

Discussing Procurement Analytics

Over the last several years, the Procurement function has evolved from a group of professionals that are tasked primarily with transactional activities to a valued strategic business partner that is consulted on numerous business decisions.  In order to fulfill this role, the Procurement teams require more and more data to gain the necessary insights needed to make these critical decisions. These Procurement Analytics are often distributed across geographies, business units, many different business processes, several disparate systems, and can be cumbersome to compile and analyze.  This makes it difficult for Procurement to use data to make timely decisions.

How can Procurement teams’ control and analyze this data and use it to gain timely and accurate insights in support of the decision making and strategic planning?  The established processes and reporting methods cannot meet these needs and will fail to manage the quality of data, omit key data inputs, or will require cumbersome and manual analyses that will not support timely decision making.

 

 

With Ivalua Strategy & Analytics you can:

Powerful spend analysis

Find opportunities easily and get spend classifications whenever you want, no need to wait.

Holistic program management

Have a complete view of all projects and initiatives, keep track of successes and roadblocks.

An eye on performance

Understand overall performance at the operational, transactional, and supplier level.

Let Ivalua help you put your data to work and drive value within your organization. Ivalua Strategy & Analytics provides a powerful, easy-to-use analytics tool right out of the box.

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Ivalua Strategy & Analytics - Make your data work for you

Utilize Ivalua’s single platform and single data repository to analyze spend, track your savings, perform deep analytics, inform your decision making and manage all procurement projects.

Ivalua brings together the entire S2P into a single cloud-based platform delivering rapid access and robust analysis capabilities for all your procurement data. Ivalua Analytics & Strategy provides the tools necessary to measure all aspects of the S2P process, better manage these processes, and drive value. The depth and fullness of the procurement analytics in Ivalua will meet the needs of users at all levels, from the buyer and category manager through the CPO and Executive Management.

 

 

Ivalua really helped us understand spend in a much deeper way. We have real-time updates of the data and full transparency in how items are classified, which really changed the way we are working in Procurement.
Elif Bozoglu Vice President of Strategy, Operations, and Procurement

Procurement Analytics

Simply understand your spend and take action

  • Classification, anytime
    Get spend classifications every day, or whenever you want — no more spend classification by batch or via lengthy monthly refreshes.
  • Find opportunities
    Gather, cleanse and classify and enrich spend data to find sourcing opportunities, track compliance and fraud, measure pricing variance and much more.
  • Simple UI and no black box
    Use a simple UI, not a complex technical tool and get 100% transparency into the process, know exactly how an invoice is classified.
  • Intelligent classification rule
    Automatic proposal of classification rules based on activity/data across S2P process.

Savings Tracking

Know how your hard work is making an impact

  • Establish goals and track progress
    Plan annual savings goals for the sourcing team and track negotiated savings at individual, team and business unit level.
  • Aggregated view
    Roll up all sourcing work for an aggregated view of savings vs. the goal, even incorporating actual spend from invoices in the reporting.
  • Project management
    Organize a team and project manage their tasks, dependencies and timing.

Performance Evaluation

Gather and understand performance data on suppliers and buyers

  • Supplier performance
    Evaluate and analyze suppliers across multiple performance and risk dimensions and prevent issues before they occur.
  • Operational performance
    Evaluate buyers on workload, productivity, savings, cycle times and stakeholder satisfaction.
  • Campaign management
    Full campaign management tools to support evaluations (templates, communications, stakeholders, etc.).
  • Powerful, robust survey tool
    Use existing template or easily build new survey for different needs and get full data analysis on responses and participation.

Program Management

Robust project management and collaboration for all your initiatives

  • Manage the procurement pipeline
    Keep track of all procurement projects, initiatives and the relevant stakeholders to have a global view of activities.
  • Visibility and participation across stakeholders
    Enable stakeholders outside of procurement to communicate, plan, manage tasks, upload docs and track progress of projects they are involved in.
  • Direct access to information
    Link projects to sourcing, contracts, requisitions, orders, invoices, performance evaluations, etc. for a full view of all activities in procurement that affect the project.

Advanced Analytics

Play with your data at a deeper level

  • Configure cube-based analytics
    Extend and configure cube-based analytics and dashboards. Customize analytics cubes with indicators and dimension.
  • Combine data from various sources
    Analyze new indicators from ERP, legacy systems or 3rd party sources and combine with your procurement data.
  • Build powerful insights
    Construct custom dashboards for suppliers, executives, lines of business and more without deep technical skills.

Ready to Manage All Spend & Suppliers with No Compromises?

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