Editor’s Note: This week on CPO Rising, we’re publishing five “best of” articles from 2014 as we reflect on the year and prepare for the new year ahead. Enjoy!
This year, for the first time, I was invited to present (twice!) at the annual ISM conference in Las Vegas. My presentations are part of the “Emerging Practitioner” track designed to help younger procurement professionals navigate the market and develop a career path. It’s a great and worthwhile pursuit for Chief Procurement Officers to invest in their people, so, in that vein, over the next few weeks we will be analyzing the key skills and capabilities (or higher-level competencies) that a procurement professional (and department) should have in place in order to execute successfully. We will be using Ardent Partners’ Procurement Staff Competency Matrix that we developed with our CPO audience. This competency matrix established industry-wide capability measures for the average procurement organization.
We hope this series will help professionals and their managers to better understand and communicate what the required capabilities are for specific job roles within the procurement department and thereby help identify, develop, and deploy the people with the right skills into the most suitable positions. Professionals can also use this series to better identify where current gaps exist in their organization or within their own skill sets so that they can take action to improve or move into roles with greater responsibility (and pay).
Today’s Competency: Data analysis
What is Data Analysis?
When we talk about data analysis in the context of procurement and sourcing, we’re talking about making sense of the data that is captured by systems across the source-to-settle process, including complex categories, supplier information, and relevant third-party data regarding supply, suppliers, and markets. Analyzing procurement data in this context is something that is far beyond simple analytics and reporting. With automation levels increasing every day, enterprise systems now generate and capture huge volumes of data. Big Data analysis projects seek to tie together large near constant streams of unpredictable data to create actionable intelligence and ultimately value for the enterprise.
Importance to the Procurement Department
We are living in a data driven world and companies today are inundated with constant data streams that need to be managed, analyzed, and actioned in order to be of any value. Sometimes this data is captured in suites or centralized in a CPO dashboard. But more often than not, this data resides in different IT, geographic, or system-defined silos, and its true value is never fully realized. When “Big Data for Procurement” is properly analyzed, it can yield actionable business intelligence by identifying trends and correlations that cannot be found with traditional data analysis tools and methods. Being able to analyze and leverage Big Data is what sets Best-in-Class procurement organizations apart from all others.
Importance to Career Advancement
We are living in a data driven world — drivers welcome!
For procurement professionals, the ability to analyze spend and other procurement data – in effect, to connect the dots – is critical for organizational success and ultimately career advancement. Unfortunately, procurement staff with titles like “data analyst” are often tasked with managing data via manual, iterative processes and antiquated technologies that preclude them from analyzing procurement and spend data. As a result, analysts aren’t able to fully realize their value to the company, and it often stunts their professional growth. But when organizations automate processes like procure-to-pay, they facilitate a more strategic environment for all. They allow their staff to move from data management to data analysis, where they can deliver true value for their departments and or customers – a win for all. Being able to say that you “realized x-dollars in savings or y-man hours for my department or client” looks much better on a resume than “managed procurement data for my department and clients.”
The CPO’s Grade
CPOs today believe that their staff is average, a C, when it comes to analyzing data. In aggregate, the CPO Grades for data analysis are neither exceptional nor unsatisfactory and present a picture of a very middle-of-the-road set of skills residing within the typical procurement department. For the typical staffer and department, opportunities for improvement abound.
We clearly see the value that companies, clients, and front-line analysts derive when a procurement department automates the source-to-settle process or deploys reporting and analysis tools to help find and manage the data. Although companies can readily see the value in investing in these solutions, they should not forget that the key to success lies not in being able to see the data but in being able to act on it.
How to Advance Your Skills
Companies need to invest in their people by training and enabling them to be better analysts. It’s not enough to buy the latest and greatest procurement solution. Spend the time and money to train your folks in the underlying analysis skills areas so they can fully leverage the tools with which you provide them. For their part, analysts should seek out professional development opportunities wherever they can. Don’t know Excel or SPSS? Boot camps, classes, and workshops are prevalent, particularly online. Ask your manager and you may be surprised to find that your company will reimburse you for the coursework.
RELATED ARTICLES
Skills for the Modern Procurement Pro – Financial Analysis
Skills for the Modern Procurement Pro – The Sourcing Process
Skills for the Modern Procurement Pro – Supply Market Knowledge
Skills for the Modern Procurement Pro – Category Management
Skills for the Modern Procurement Pro – Cash Management
Skills for the Modern Procurement Pro – Contract Management
