There may be no greater advantage for the modern enterprise than visibility. Today’s procurement organizations are often under pressure to not only drive down costs while improving category management, but to also enhance their array of source-to-pay processes in support of larger enterprise objectives. While collaboration, automation, and other core strategies advance procurement’s overall value and influence, it is within the realm of intelligence that Chief Procurement Officers and their teams may find the greatest organizational impact. In fact, the next great path to procurement performance improvement will be blazed with the next generation of spend analytics and data-driven strategies.
Today’s CPOs are bound to both the traditions of the past and the technologies and strategies of the future, often balancing these aspects to drive value for fellow stakeholders – and the enterprise at-large – while operating within budget and resource constraints. While procurement’s top business pressure over the past five years has consistently been to “find more savings,” in order for the function’s impact to extend far beyond dollars and cents, it is critical for enterprises to embrace strategies and solutions that can boost procurement’s overall reach. For the modern procurement function, the most prudent path forward is one that incorporates procurement’s “Big Data” and their associated business intelligence-driven concepts.
The good news is that the procurement industry already has a tool in the form of automated spend analysis, which allows it to drive visibility into an array of critical areas related to enterprise spend, including an ability to analyze historical spend by supplier, category, region, etc. The power of spend analysis is quite tangible, with many procurement departments leveraging the capabilities of their spend analysis tools to achieve a deeper understanding of enterprise spend in a scalable and repeatable way, transforming spend data into intelligence and that intelligence into strategies. While spend analysis solutions are not yet universally adopted, the procurement organizations that use spend analysis typically manage a higher percentage of enterprise spend and source more of their addressable spend each year. Spend analysis has become a powerful tool in procurement’s arsenal and those CPOs who embrace more analytical strategies find themselves better positioned to engage internal stakeholders and manage suppliers in support of the enterprise’s primary objectives.
If you are interested in learning more, consider listening to Ardent’s “Procurement Rising” podcast series. Click below to listen to new episodes. The podcast is also available on Apple, Spotify, Stitcher, Google, or wherever you get your podcasts.
