How Multiple Buyers Can Work Together for Common Benefit – New Paper

We are delighted to bring you another Spend Matters paper - free to download. Community Intelligence – A Procurement Revolution is sponsored by leading spend management software firm, Coupa and written by Peter Smith before he stepped back from Spend Matters. It addresses how new and improved technology, as well as changes in attitudes among executives, is opening up options for different organisations to work together for mutual benefit in areas across the procurement landscape.

It looks at the concept of "community intelligence" - using the collaborative power and knowledge of multiple organisations and procurement professionals for everyone's benefit. While this isn't a new concept, developing technology is revolutionising what is possible in areas including collaborative buying, supply chain risk management and supplier performance management. The implications of community intelligence go way beyond reporting and benchmarking of transactional KPIs. There are many ways in which the strength and value of the “community,” allied to the latest technology, such as artificial intelligence and machine learning, can be used to help procurement functions and professionals derive benefits for their organisations and make better supply management decisions.

Here is an extract which we hope entices you to download and read the rest:

Community Intelligence – Progress to Date

Community intelligence as a term applied to the technology-enabled ideas we will discuss later in this paper is a relatively new concept, but the underlying principles are not particularly radical. Focusing on the ways in which multiple buyers can work together, the following examples will be familiar to most readers.

  • Formal and informal benchmarking and best practice groups, consisting of procurement professionals from different organisations who meet, discuss and share ideas, or even identify areas for operational collaboration. Some were created by consulting firms (the author was involved in an Accenture-created group, that outlived Accenture’s involvement and brought together around a dozen CPOs), others have emerged organically, in a particular industry, or around a particular theme or identified need.
  • Third-party managed benchmarking studies or surveys e.g. Hackett and Deloitte CPO surveys. In some cases, the output is public or semi-public, in others it may be more restrictive, and it can be expensive to participate fully. But the aim is to gather information or views from different parties and produce useful output; metrics and analysis that can be useful to participants (and potentially others).
  • On a more direct note, collaborative buying sees multiple organisations actually merge their buying requirements for a certain product or area and look to do common deals with suppliers. This is very common in the public sector in most major countries and has also been successful in certain industry groups. The activity may be run by the participants, or a third-party CBO (collaborative buying organisation) may take the lead.
  • Shared databases such as those providing supplier compliance and qualification information to buyers either generally or for a particular industry, like oil and gas. These reduce the need for every participant to collect the same information, and every supplier to provide the same information to multiple customers. Dun & Bradstreet is in effect the longest established and best known of these services – bringing together financial and credit information so that users on both sides save time and effort.

All of these approaches have their benefits, as evidenced by their widespread use across many organisations, industries and countries. However, we would argue that for a number of reasons, we have not seen any real step-change in their use or success in recent years.  Why is this?  (Download the paper to find out!)

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