What if your procurement team could see in a single glance if you’re purchasing services on contract or identify cost savings through consolidated purchasing opportunities? Today’s procurement analytics platforms are making responsive, agile, and strategic procurement processes a reality for small-to-medium businesses (SMBs).
Deeper visibility into every aspect of sourcing and procurement analytics helps SMBs gain a better understanding of how they’re spending and where they can gain efficiencies, as well as oversight into aspects like spend by category and account. Better data management also translates into timely, compliant, and proactive contract management. Analytics dashboards are a core component of the different Oracle Procurement Cloud modules. Streamlined and visual reporting also makes it easier to spot trends and share insights with a variety of stakeholders. Here’s a closer look at why powering your procurement team with analytics can be a smart investment.
If you’re a typical SMB, your procurement team has a major workload handling transactions and communicating with suppliers. Access to better data and automated systems can shift some of that workload away from the buyer and, in the process, provide insights for costs savings, process optimization, and more. Analytics help your team make the shift from transactional approaches to procurement—focusing on individual contracts or transactions—to seeing larger patterns. It’s easier to identify opportunities, efficiencies, and risks. Analytics can help your team to be more strategic and see what’s being bought, what’s being contracted, and whether or not spend is on contract. Real-time insights also make it easier to identify contracts that are at risk or nearing their completion date.
The right data tools can also support the more nuanced aspects of the procurement process. For example, analytics help you understand issues such as whether certain categories of spend are going over budget and easily identify exactly where products or services are being purchased. These analytics provide you a with holistic view and end-to-end visibility into the entire procurement lifecycle. Access to better data allows your procurement team to become better decision makers and more effectively advise stakeholders throughout your business.
One of the key areas where growing companies see an immediate payoff with analytics is contract management. All too often, we see organizations that simply go out and buy things when they need them, without developing a strategy. Organizations may be buying items off contract or entering purchase orders without any backing requisitions. The end result can be unapproved purchases, spending over budget, and lost opportunities to streamline and manage the process.
Analytics can help you identify what’s on contract and what’s not. Reporting and data visualization help you find opportunities for optimization and areas of risk. For example, one company found that both their direct and indirect buying costs were too high. Analytics helped them quickly identify opportunities to streamline spending, what categories were priorities for executing contracts, and who among their existing suppliers would make effective large-scale partners.
Today’s businesses move fast in every area they operate in. Analytics and reporting are a cornerstone of offering the kind of responsive, agile procurement that supports business speed. If every purchase needs to be manually reviewed and approved, workloads and delay times quickly become untenable. Procurement technology can help.
One example is how procurement systems allow you to tie purchases from a category directly to charge accounts. As a result, anyone in the field can requisition an item, and the system quickly determines if an item is on contract and completes the process. It's enabling higher productivity with fewer keystrokes, time, and attention—while making sure that purchasing activity adheres to company guidelines.
In many cases, analytics and real-time alerts help support more timely contracts management. One client we recently implemented a procurement system for was making the move from a manual process. The feature they were most excited about was the ability to connect their analytics to real-time alerts. Is a PO nearing the approved spend limits before the contract term? Is a key contract heading toward its expiry data? At the project level, budgets can even help identify where initiatives might have been projected incorrectly.
Depending on what areas are critical to your business, it’s possible to set up alerts in the system. For example, you might want to be notified 90 days before a contract is ending. That gives you time to ensure the budget is on track, look at options for renewal, and have a plan in place to verify that all deliverables have been met. The same notifications can be sent to suppliers, so they remain in adherence with whatever contracts they’ve agreed to along the way.
One of the pitfalls of implementing an analytics process happens when prospective clients say that it’s easy to assume you need to see analytics for every aspect of your business, rather than being strategic and focusing on the most critical parts. With too much data, it’s easy to get to a point where the things that are really crucial start to not stand out any longer. Instead, we advise clients to sit down and think about what’s most important to their business. For example, we often seen organizations that benefit from seriously looking at something that’s going to save them money, reduce risk, or call attention to a process that needs more oversight.
The bar has been raised: today’s managers want real-time data access. It’s important that they have visibility into what’s happening at the business, at their fingertips, in a dashboard. Increasingly, managers want to stay out of their procurement systems other than having that one-stop dashboard view. Solutions like Oracle Procurement Cloud can simplify reporting and make it easier to communicate with stakeholders around your business, by integrating key data points onto a single page. Visibility management has changed the conversation.
Whether your small-to-medium business is looking to streamline operations, identify opportunities for spending reductions, or keep a tighter control on contracts, analytics can help. With deeper visibility into your data and procurement processes, your team can make smart strategic decisions and provide the necessary insights and support. Data can streamline your procurement process and turn it into a competitive advantage.