Being disruptive is not just about changing the game, it also involves looking at an industry, identifying an existing gaps and building a new way to transform the market. In order to be a market disruptor, brands need to be willing to take risks and make decision driven by insights and data.
Disruption can either be internal or external. An organization does not have much power over the external disruption, but nevertheless, internal disruption can be maneuvered and achieved by the organization. This is made possible by revamping the supply chain and existing procurement practices thereby creating competitive advantage for the organization. But how can procurement analytics be leveraged to bring a disruption in the market, you ask?
The Procurement Game– How It’s Done?
Earlier, the procurement function was not so relevant in the organization. But today, it is an important corporate strategy that promises and delivers a much broader value proposition such that it is now embedded in the KPIs of the company rather than merely focusing on cost savings. To improve its game, the business should be an expert at managing stakeholders – internal as well as external and leverage analytics to make better strategic decisions. The CPO must consider other factors such as supply stability and risk, supplier performance, quality and compliance, geographic restrictions and component obsolescence, while making sourcing decisions. If neglected, these factors can wreak havoc, causing increased direct costs, delays in product launch, thereby impacting the product revenues.
Due to global supply chains, increased supply volatility and centralized procurement organizations, CPOs cannot rely on intuition or past experiences to effectively manage procurement. This process is heavily dependent on data and analytics. The key role of a CPO entails analysis – whether it’s ascertaining spend, tracking supplier performance or managing stakeholders. The secret to an efficient procurement exercise is to make compliant purchasing easier or better, make maverick purchasing more difficult.
Before Disruption – Questions A CPO Must Ask
CPOs must take decisions driven by data and market insights collected from a variety of sources and at different points of time. However, a procurement strategy worth disrupting the market, would answer the following questions-
- How does it contribute to top-line growth and customer experience?
- How can procurement shorten the lead time while bringing about organization agility and resilience?
- Does it anticipate supplier problems by highlighting vulnerabilities to key suppliers and identifying potential interruptions in the supply chain?
- Does it help improve procurement performance by consistent process measurement and analysis?
Not many organizations have KPIs for these questions or parameters. It is rightly said, if you cannot measure it, you cannot manage it. It is essential to put resources into those projects and initiatives and projects that can be articulated quantitatively. Procurement analytics supports the organization in taking decisions that are driven by insights and can be quantitatively measured.
The Disruptive SpendEdge Benefit
At SpendEdge, we provide tailored solutions by gathering market specific information from various data sources, to gain actionable insights to make strategic sourcing and procurement decisions. We help clients from various industries in understanding the best sourcing and category management practices, identifying and selecting the best cost sourcing locations by obtaining detailed information on the supply market and supplier landscapes and help in developing robust procurement strategies.
For more information on procurement analytics, spend analytics software, spend analytics, and supply chain analytics: