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.
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.
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.
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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.
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