This post is based on material from the Spend Matters research brief, Changing Roles of Procurement Leaders - The Analytical CPO, written by Peter Smith. Registration is required to access this document – but free access to the content has been underwritten by BravoSolution until December 2013.
In his paper, Peter Smith mentioned seven areas where data and information are empowering procurement and offering opportunities, and here we offer up the first four. Note that these are simply brief headlines; each of these is a significant topic and opportunity in its own right!
- Spend analytics - This is perhaps the most obvious example of how computing power has provided more and better data. But even if the data is both detailed and beautifully presented, we still need to be able to interpret it, understand what it means, and determine the right potential opportunities and courses of action arising.
- Market analysis - This is a classic example of how our access to data has grown, and “big data” continues to influence this area even further. We can find out more and more about our suppliers and markets, but again, knowing how to analyze, sift, and sort the mass of information is key.
- Negotiation - This is not such an obvious area perhaps, but availability of information is changing the way many business negotiations can be conducted. An analytical approach to the negotiating battle means being armed with useful data – whether that is global market trends, price benchmarking information, or history of usage and pricing from within your own organization.
- Sourcing and supplier selection - Seen as a mechanical process in some organizations, there is a whole analytical science around designing evaluation methodologies, determining evaluation criteria and weightings, scoring systems, or balancing cost and non-cost factors. This is a fascinating area with much potential for making better decisions, but one that requires an analytical viewpoint.
Read the full Spend Matters Research brief: Changing Roles of Procurement Leaders - The Analytical CPO (free, registration required). Temporary access to this material is underwritten by BravoSolution until December 2013).