The Power of Analytics: A CPO View Into Supplier Performance, Contracts, and Risk
Categories: Analytics, Learning / Research, Supply Risk Management | Tags: L2, Process and Best Practice
This post is based on material from the Spend Matters research brief, Changing Roles of Procurement Leaders – The Analytical CPO. Registration is required to access this document – but free access to the content has been underwritten by BravoSolution until December 2013.
Yesterday, we presented four areas where data and information is empowering procurement and offering opportunities – at least to those who can get to grips with it. Now, we have the final three.
Collaborative/market informed sourcing – The most complex sourcing tasks are increasingly addressed using market-informed or collaborative sourcing tools and techniques. This has become possible purely because of the growth of affordable computing power, and is gaining traction as organizations see the huge benefits it can bring even to mature category-managed spend areas. (See our research paper, Market-Informed Sourcing: A game-changer for Procurement, for more information on this topic)
Performance and contract management – The quality control disciplines in manufacturing and pharmaceutical were early adopters of statistical techniques and using data to improve performance, going back to the work of Deming and Juran. But this goes beyond just product quality into the wider aspects of supplier performance, where measurement and analytical approaches are replacing how we “feel” about our suppliers’ performance.
Risk management – Analysis should sit at the heart of risk management, from basic performance management through to analytical techniques that use complex models to consider risk factors, probabilities, and expected outcomes or costs. The basics of good contract management need to be in place first, but for most organizations, this is an area of opportunity – or risk if it isn’t being done well!
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.
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