How Real-Time Data Helps Employees Purchase Better

Data has always been of vital importance for how companies measure, control and make decisions. Accurate, relevant and timely data provides powerful information for users of enterprise software — or, in its absence, exposes a significant blind spot.

Many organizations struggle to consistently access useful information, and continue to operate with limited, imprecise and outdated data. Current business trends, however, demand agile and resilient procurement processes supported by accurate, timely data. Companies that ignore this tide simply won’t survive in our digital era if decisions are based on limited, inaccurate or outdated information.

RELATED WEBINAR: Transforming Procurement in Real-Time

Within organizations, procurement has become a strategic partner with an impactful contribution to company profitability. Procurement processes are now a fundamental component in any digital business transformation. The quality of the information with which procurement operates can affect the performance of the entire organization.

In this three-part series, we discuss the necessity of quality, real-time data in procurement processes, the way technology solutions offering this data is changing the procurement user experience, and how new technologies can enable corporate buyers to search, compare and obtain data on any product or service that they want to buy on one digital platform.

The Importance of Real-Time Data for Purchases

The concept of real-time data promises procurement access to all structured and unstructured information that is up-to-date at the time of making the purchase decision that is relevant and up to date. This information guides and provides certainty to users when making their purchase decision.

To take strategic sourcing as an example, the importance of spend analytics to inform key events such as contract negotiation are obvious to any organization. Unfortunately, many of these analyses are carried out with historical, poor-quality information. In such cases, projected expenditures are inevitably inaccurate. Imagine how different this negotiation would be if the negotiator has high-quality, updated and complete data that provides exactly what was purchased to date with relevant, insightful metadata that provides the required level of detail (e.g., business unit, category, supplier, price history, competitor prices, and other critical information).

The necessity for this kind of data is even more important with the rise of electronic purchasing solutions, in which procurement users can now create their purchase requisitions through an electronic store, search for and compare products and services, and complete their transaction in a similar manner to a consumer purchase. Imagine a scenario where such a user needs a product that the company already has in stock, but because the inventory system is not integrated, or the information is out of date at the moment of purchase, the user issues a new online requisition that results in redundant and unnecessary expense. Another common scenario occurs when the information in the online catalog is not updated, and purchase orders are issued with a higher price than the negotiated rate.

Reliable, useful and real-time information during the buying process is an essential element to help procurement users make successful buying decisions in compliance with business objectives.

Examples of Relevant Real-Time Data at Time of Purchase

The new approach to self-service corporate purchasing through e-shops (enabled by modern purchasing solutions) has given a lot of decision power to the procurement users, which has forced companies to provide them with all of the necessary real-time data at the moment they are making their purchase decisions. Examples include:

  • Detailed and updated data (descriptions, drawings, prices, supplier information, etc.) of the products and services to which the user has access, which can be part of either internal or external catalogs
  • Real-time data comparison between the products or services from different supplier catalogs (internal and external)
  • Classifications that the buying company gives the supplier (preferred, small business, woman-owned business, local business, etc.)
  • Relevant data on suppliers (risks, liquidity, supplier ratings, performance, available capacity, delivery times, etc.)
  • Data related to inventories of the product or of a similar product
  • Data related to supplier price history
  • Data related to discounts for purchase volumes
  • The status of the purchase contract or any other relevant contract data to make the purchase decision
  • The budget related to the purchase to be made
  • Relevant market data (external stores) for comparative purposes, such as similar products or current promotions
  • Risk data related to the purchase (natural disasters, currency devaluation, supplier acceptance ratings, etc.)
  • Data in the form of alerts on off-budget purchases, inactive contracts or similar products availability, preferred or alternate suppliers, existing purchase orders, etc.

The importance and influence that relevant, real-time data exerts on purchase decisions at the moment users make them is extensive. To support employees with this information during their purchasing process creates a new level of awareness for the procurement organization and benefits the broader business.

Procurement Benefits

Having real-time data within a single platform that supports users to make their purchasing decisions is a benefit in itself, but not the only one. Efficiency in purchasing processes and activities is improved, and user productivity is also increased. Here are some examples:

  • Finding and selecting the ideal product or service in accordance with business rules and expected results — a purchasing approach guided to its maximum power
  • Identifying wrong/outdated data within the purchasing documents (purchase orders/invoices) prior to their processing, thus avoiding inefficiencies and errors
  • Accelerated fulfillment of estimated savings by using relevant, real-time information that guides the intelligent process of generating savings
  • An effective analysis of the expenses for contract renegotiations, taking advantage of the opportunities real-time information reveals
  • The transformation of real-time data into information and intelligent actions that generate savings and efficiencies, such as price comparison against the open market, and remove inefficiencies in the purchasing processes, such as delayed approvals or invoice matching errors.
  • Greater efficiency in the user's buying experience (uninterrupted) by having all real-time data in one place, without having to go to another system to consult them
  • Increased productivity in price auditing processes by having real-time prices ready for automated comparison against contracted prices
  • Alerts for issues on discrepancies or breaches (contracts, budget, etc.), where real-time information feeds processes that identify such discrepancies
  • Collaboration with useful and real-time information between the buying organization and its suppliers, to avoid misunderstandings, eliminate communications supported by limited information and prevent delays in related processes
  • The handling of disputes between buyers and suppliers using relevant and real-time information, thus accelerating their resolution
  • Risk analysis of suppliers, avoiding potential breaches and possible losses of time and money
  • Higher productivity in payment turnaround to suppliers that enables financing options, achieves efficiencies and avoids errors due to erroneous data
  • Effectiveness in the integration and distribution of data with other systems
  • Actionable intelligence to inform business decisions at the time of the event, with accurate reports and dashboards to guide procurement strategy

To conclude the first part of this analysis, it is critical to remember that having enough data to make decisions is not the same than having real-time data, which in our conception implies having all of the existing and relevant information for decision-making (structured and unstructured). Although the gap between these definitions may seem minor, this detail makes an enormous difference — especially when corporate targets are not met.

Don’t miss the next two parts of this series, in which we explore how real-time data is changing the way procurement users approach technology and the capacity offered by some solutions in this regard.

Related: Free Webinar

Join Spend Matters’ Xavier Olivera along with a series of guests from Aquiire and the LDS Church as they discuss the benefits of real-time data and how they and others are using it to their advantage.

Register now for one or all of these quick-hit 15-minute webinars:

  • PART ONE: Achieving True Purchasing Control Through Real Time Data, Guided Buying, and Compliance
  • PART TWO: How Real-time Data Transforms B2B Procurement Shopping and Supplier Management to Accelerate Savings
  • PART THREE: User Adoption and Huge Savings through Real-Time Procurement Marketplace

View the webinar here.

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