Data driven procurement is the newest trend, are you ahead of the game?
Data IQ is a new requirement for any high performing procurement team. The best way to get ahead is to use data to drive your strategies and decision-making. Rather than just the traditional one-stop-shop, it’s time to embrace multiple tech solutions.
Here are three procureTech considerations to help you get started.
The landscape for procurement technology is changing dramatically. The procurement function is continually evolving and trying new things, but now organisations are looking beyond the “one-stop-shop” approach of finding one system that will provide the holy grail of spend visibility. As more and more procurement teams are starting to realise, the holy grail is incredibly elusive at best, and non-existent in most cases.
That’s where Data IQ comes in.
Enhance your data IQ to find data driven procurement solutions
What can be done about the lack of visibility and the legacy of heavy investment costs that have already gone into other procurement technology systems? Lance Younger, CEO of ProcureTech suggests that you can turn to some of the 4,000 tech vendors that have emerged in the industry in recent years for solutions. The industry is creating different products and not all seek to replace systems. Far from it: they instead seek to enhance or work with existing systems to add more functionality.
Let data IQ be a greater driver of change
Organisations are facing more pressure to supply information in regards to sustainability, supplier diversity, modern slavery, and other ESG considerations. Current systems are not always able to keep up with the increase of functionality required or the changing pace of procurement regulations and data intelligence requirements. Instead of investing in one place, procurement teams appear to be moving beyond the ERP system and looking to add to the procurement technology ecosystem.
Do you have new tech nerves?
Choosing new tech can be daunting. Often there is a lengthy business case required that must clearly articulate the problem, the opportunity, the costs, and the benefits. The c-suite needs assurance that they will be able to measure a clear Return On Investment (ROI).
With new suppliers, new markets, and integrative technology becoming more popular than ever, how do you get started?
How data IQ can combat the three biggest considerations when choosing new tech
There are three common considerations that must be clearly articulated before the exploration of technology solutions can begin.
The systems being considered for implementation have to be intuitive and easy to use, with heavy emphasis on the end users’ experience. Given the sharp rise in prominence of Procurement technology, clunky technology will cause the brand to suffer. “Clunkiness” may lead to a failure to demonstrate ROI and, therefore, failure to report on the benefits cited in the business case to get the procurement tech in the first place – creating a vicious cycle! This is why companies like Amazon invest significant resources into making their experience seamless.
Don’t get caught up in the interface. Make sure you scrutinise what data is being captured and how it is being captured. If the data isn’t being captured, coded, loaded or stored in the right ways, how will you be able to interrogate it for insights? Don’t be the team that launches new tech only to find you don’t get the right answers for the reports you need. Take the time to test this functionality: it all points back to quality data.
While there may be an overarching ERP system in place, supplementing it with solutions that can fill gaps is becoming increasingly important. There are thousands of suppliers and products that can plug into almost any system (without compromising data security) so more and more procurement teams are looking to create technological ecosystems and move away from looking at stand-alone products or systems.
Why should you care about data driven procurement?
In Coupa’s Procurement 2022: BIG Trends and Predictions report, one of the biggest trends predicted for 2022 was that digital transformation would be a high priority for CPOs. Now, the “data-driven CPO” will start to drive a culture and requirement for procurement teams to do more than just talk about data: they’ll need to actively use it to keep pace with the evolving requirements of organisations and supply chains. Decision-making and strategies will be driven by data, as procurement teams start to build their data IQ.
As McKinsey & Company points out in their technology and supply chain article “no two supply chains are the same” there is no failsafe plan to fall back on. Procurement teams must experiment and accept that they may not get it right the first time. With the backing of the data-driven CPO there may be a willingness to experiment, with acceptance that some experiments will fail. With the agility of the tech market and the high number of competitors, procurement tech solutions don’t have to blow the budget. The tech available today is “quicker and cheaper to implement, more straightforward to manage and easier to scale than those of the past”.
Procurement technology can seem daunting but there are many ways you can get started on your journey. Follow the SpendHQ Masterclass series to learn more about how to increase your data intelligence and ensure you are best placed for success.
- WATCH OUR LEVEL UP YOUR DATA IQ VIDEO PODCAST SERIES
- WHY YOU NEED TO PAY ATTENTION TO YOUR DATA
- IS POOR DATA STOPPING YOU FROM NAILING A WORLD-CLASS PROCUREMENT STRATEGY?
- THREE BARRIERS BLOCKING YOUR PROCUREMENT DATA IQ
- CLEAR OUT THE COBWEBS FROM YOUR SPEND DATA
- WHEN THE DATA STRATEGIES ALIGN
- THREE DATA AND ANALYTICS CONSIDERATIONS EVERY ORGANISATION SHOULD MAKE IN THE PURSUIT OF DIGITAL TRANSFORMATION