Procurement has become vital for an organisation to maintain its long-term strategic planning and obtaining business goals. If your company has access to real-time data on all the transactions, you will make an informed decision in the future. With the launch of procurement software solutions, operational proscesses have become more smooth and effective. Beyond analysing and collecting data, a company must prepare how to think strategically. Unfortunately, firms do not set up a team that can plan ahead and do not know what value procurement intelligence holds.
Understanding Market Intelligence
Before you enjoy the benefits of procurement, you must know what this is and how data is collected. Procurement market intelligence may be based on Google searched and labour-intensive efforts. The data can also be gathered by third-party sources for analytical purposes. Leaving the source aside, there are three different aspects of this intelligence.
Market Research –
The first aspect involves understanding the types of data you need to accumulate and how it will be accessed. In addition to this, you must determine how the data should be analysed and stored. Though these seem basic concepts, they lay the strong foundation for supply market intelligence. Market research needs ample and focussed attention.
Competitive Intelligence –
Competitive intelligence is another important which involves checking a number of factors, including competitive dynamics, disruptors and more. Quantitative data must be collected.
Supply Market Analytics –
besides these elements, intelligence also focuses on supply markets analytics. A procurement expert must gather and check the data to suit the suitable supply markets.
The Five Elements Of Procurement Intelligence
Intent Focus –
A clear set of goal will let you and your team create strategies than can help you achieve organisational goals. With the intention to improve procurement, your team will already know where to make adjustments.
Intelligent Opportunism –
Strategic thinking will not help much by accessing data if you do not bring new changes or opt for new experiences. Managers that encourage people to take risk and innovation, even at the cost of failure, will come up with alternative methods, which will make them evolve as per the business environments.
Systems Perspective –
Generally, this is understanding of how all the tiny things will work and how effective they prove to be for your working ecosystem. With accessible procurement software, you can get insights into the company’s financial health.
Thinking In Time –
It is vital that you connect with the current reality of the business situation before reaching the destination. Even if you do not have enough resources or suitable labours, you need to keep on moving in your track. With a small tweak in the strategy, you can bring major changes in the organisation. However, instead of thinking much, make the most use of the resources that is available at present. When you focus on procurement intelligence, your team and the managers will understand the supply chain and which objectives can be accomplished. The employees and clients will have more transparency into the operations for better interaction between the parties.
Hypothesis Driven –
Strategic thinking needs data and creativity. When you think analytically, you can explore new ideas and determine their impact. This aspect of market intelligence will boost your company to continuously evolve and find ways to make things cheaper, profitable and efficient.
Market intelligence is just about finding the right data and then come up with strategies and to drive the data in the right direction. A core part of this intelligence is willing to do things in a different manner. Having a procurement or purchasing team is an important function of your company. Whilst installing procurement software alone cannot bring changes, you need to have the right data to make informed decisions.
The Importance Of Market Intelligence
To know the importance of market intelligence, read on.
Recognise The Right Supplier –
Maximum of the business struggle to find the right quality of the suppliers. Many operate in a highly regulated industry which adds more complexity to the situation. When you communicate with the wrong suppliers, you may lose a lot of money. Their poor and inconsistent performance can affect production in the long run. Identifying the right suppliers will increase efficiency, improve compliance, reduce costs and enhance reliability.
Analyse Spend Data And Trends –
Businesses are tremendously benefitted as they have started relying on automated sourcing tools for procurement intelligence. However, over the upcoming years, sourcing and spend analytics are the two areas that are most to be affected by technology. When you can quickly and accurately analyse the spend data and trends, this will reduce other problems as well. Many specialists have stated overspending is one of the major concerns in a company.
Complete Supplier Analysis And Risk Monitoring –
With the help of market intelligence, you can understand the existing supplier relationship and the risk factors involved. Once you have understood the capabilities of your suppliers, you need to manage and monitor them. In measurable analytics, automation can improve vendor performance metrics, control and security.
Improve Credibility –
Most of the businesses require approval from the department management to accept the request. The managers analyse the requests closely to understand if the price is justified to make critical decisions. The request gains credibility if it is supported by strong data. This also helps the department managers to make superior decisions.
There are plenty of manual methods to gather and analyse procurement market data, but, in reality, many organisations face a wide range of struggles and problems that can be addressed using automated processes. Time and accuracy have helped many firms to make the right decision regarding new and current suppliers. The companies have been able to save money and achieve other benefits by reducing the risks. By considering this, procurement specialists may need to evaluate the collected data and identify the areas for improvement. If you are wishing to stay ahead of your competitors and know the current scenario of the market, hire a team of procurement experts and see how your business adopt new changes and improve.