Practical Guide to Generative AI in Procurement
Procurement Value Measurement A Spotlight Report from The Hackett Group
Powerful spend analysis
Find opportunity easily and get spend management classifications whenever you want, no need to wait.
Holistic program management
Have a complete view of all projects and initiatives, keep track of successes and roadblocks.
An eye on performance
Understand overall performance at the operational, transactional and supplier level.
What are Procurement Analytics?
Procurement analytics is the process of tapping into the large reservoir of procurement data using quantitative and analytical methods to develop a set of actionable insights to drive value and improve operations.
This is accomplished by collecting the procurement data from across various sources, classifying the data to standard or user-defined parameters and presenting in a visualization that allows the data to be consumed by decision-makers.
This is where many of the key decision processes break down and fail to yield the requisite benefit. Many organizations are unable to aggregate and analyze this data due to the lack of tools and systems to performs these analytics.
Finding Value in Procurement Analytics
Analytics within Procurement is not a new concept for organizations. Many organizations have been using Procurement Analytics in one form or another for many years.
These organizations have long recognized the value of these analytics, but this recognition has traditionally been limited to just Spend Analytics and have been viewed as something that is only used by Procurement Professionals.
However, the power of Procurement Analytics extends far beyond just spend and into all parts of the Source-to-Pay (S2P) process, and organizations are taking notice of the depth of the analytics available to support business decisions at all levels.
Procurement Strategy & Analytics
Procurement Analytics Provide Critical & Actionable Data
The data that can be used to support analytics is pervasive throughout the S2P process and can be used to support a variety of decisions from Strategic Sourcing, Contract Management, all the way to transactional Procurement. The following are just some of the areas where Procurement Analytics can impact key parts of the S2P process.
Procurement Analytics can be a key factor in limiting risk or evaluative performance with your suppliers. During the supplier onboarding process, analytics can be used to aggregate risk data so individuals can determine if a supplier is a risk long before they get their first purchase order. The best way to mitigate risk or detect declining performance is to have analytics at your fingertips
Regarding Strategic Sourcing, Procurement Analytics can be used to segment spend across commodities, geographies, and entities to identify opportunities to generate savings and value. These same analytics can help identify key triggers to engage in a sourcing event. This includes information on a supplier’s risk, quality, and performance profile, as well as information on buying patterns or demand forecasts.
Beyond being used to identify savings prior to and during sourcing events, Procurement Analytics from transactional Procurement, invoices, and contracts can be used to identify maverick spend that could be eroding savings earned during the Sourcing process and introducing risk into the Procurement Process.
Procurement Analytics can also generate significant value for the transactional aspects of Procurement. These analytics can measure purchase order cycle times, bottlenecks, and can be used to study and recommend savings and cash flow improvements associated with payment terms. With Procurement Analytics, users can evaluate the accuracy of payments, monitor for duplicate payments or fraud, and evaluate discount opportunities.
Procurement Analytics – The Data Challenge
Over the last several years, the Procurement function has evolved from a group of professionals that are tasked primarily with transactional activities to a valued strategic business partner that is consulted on numerous business decisions.
In order to fulfill this role, the Procurement teams require more and more data to gain the necessary insights needed to make these critical decisions. These Procurement Analytics are often distributed across geographies, business processes, and more – and can be cumbersome to compile and analyze. This makes it difficult for Procurement to use data to make timely decisions.
How can Procurement teams’ control and analyze this data and use it to gain timely and accurate insights in support of the decision making and strategic planning? The established processes and reporting methods cannot meet these needs and will fail to manage the quality of data, omit key data inputs, or will require cumbersome and manual analyses that will not support timely decision making.
Ivalua Strategy & Analytics – Make Your Data Work for You
Utilize Ivalua’s single platform and single data repository to analyze spend, track your savings, perform deep analytics, inform your decision making and manage all procurement projects.
Ivalua brings together the entire S2P into a single cloud-based platform delivering rapid access and robust analysis capabilities for all your procurement data. Ivalua Analytics & Strategy provides the tools necessary to measure all aspects of the S2P process, better manage these processes, and drive value. The depth and fullness of the procurement analytics in Ivalua will meet the needs of users at all levels, from the buyer and category manager through the CPO and Executive Management.
Ivalua really helped us understand spend in a much deeper way. We have real-time updates of the data and full transparency in how items are classified, which really changed the way we are working in Procurement.
Elif Bozoglu
Vice President of Strategy, Operations, and Procurement
Cengage
Procurement Analytics
Simply understand your spend and take action
- Classification, anytime
Get spend classifications every day, or whenever you want — no more spend classification by batch or via lengthy monthly refreshes. - Find opportunities
Gather, cleanse and classify and enrich spend data to find sourcing opportunities, track compliance and fraud, measure pricing variance and much more. - Simple UI and no black box
Use a simple UI, not a complex technical tool and get 100% transparency into the process, know exactly how an invoice is classified. - Intelligent classification rule
Automatic proposal of classification rules based on activity/data across S2P process.
Savings Tracking
Know how your hard work is making an impact
- Establish goals and track progress
Plan annual savings goals for the sourcing team and track negotiated savings at individual, team and business unit level. - Aggregated view
Roll up all sourcing work for an aggregated view of savings vs. the goal, even incorporating actual spend from invoices in the reporting. - Project management
Organize a team and project manage their tasks, dependencies and timing.
Performance Evaluation
Gather and understand performance data on suppliers and buyers
- Supplier performance
Evaluate and analyze suppliers across multiple performance and risk dimensions and prevent issues before they occur. - Operational performance
Evaluate buyers on workload, productivity, savings, cycle times and stakeholder satisfaction. - Campaign management
Full campaign management tools to support evaluations (templates, communications, stakeholders, etc.). - Powerful, robust survey tool
Use existing template or easily build new survey for different needs and get full data analysis on responses and participation.
Program Management
Robust project management and collaboration for all your initiatives
- Manage the procurement pipeline
Keep track of all procurement projects, initiatives and the relevant stakeholders to have a global view of activities. - Visibility and participation across stakeholders
Enable stakeholders outside of procurement to communicate, plan, manage tasks, upload docs and track progress of projects they are involved in. - Direct access to information
Link projects to sourcing, contracts, requisitions, orders, invoices, performance evaluations, etc. for a full view of all activities in procurement that affect the project.
Advanced Analytics
Play with your data at a deeper level
- Configure cube-based analytics
Extend and configure cube-based analytics and dashboards. Customize analytics cubes with indicators and dimension. - Combine data from various sources
Analyze new indicators from ERP, legacy systems or 3rd party sources and combine with your procurement data. - Build powerful insights
Construct custom dashboards for suppliers, executives, lines of business and more without deep technical skills.
Related Resources
Report
Spend Analytics: Key to Procurement Transformation at Cengage
Read why they chose Ivalua
Report
Gartner Magic Quadrant for Strategic Sourcing Applications Suites 2018
Ivalua Named Leader for 3rd Year in a Row
