Procurement strategy: How to use data properly

Procurement strategy
September 5th, 2019
Share :
{{totalComments}} comments

For the most advanced companies, digital transformation now forms the backbone of their procurement strategies. Boosted by digital resources that add their fair share of innovations year-on-year, procurement strategies are better equipped than ever before to achieve the three fundamental goals:

  • Adding value to the company and the various departments.
  • Managing supplier and product risks.
  • Harnessing collective intelligence, for innovation and excellence.

In this way, managing data quality becomes a key issue that is central to a procurement strategy. The French newspaper "L'Opinion" devoted an entire article to the challenge of managing data in its recent report on procurement's big bang. Olivier Rihouet, from the accounting and consulting firm Grant Thornton, believes quite simply that data is becoming a raw material with high added value for 21st century companies. »

The article, written by Mériadec Raffray, suggests that adopting the following four actions in order to position data quality in its rightful place, at the core of a procurement strategy: 

Procurement strategy: Is your data reliable?

Almost one in every two company managers who have integrated transactional tools [1] into their processes believe supplier data is unreliable [2].

The weakness highlighted by stakeholders and experts is modified raw data, having been altered through successive processing using ERP tools. However, the reliability of client and supplier data collected by companies is a regulatory obligation that is covered by France's Sapin II law.

The main lever for a successful digital procurement strategy is therefore implementing a structured approach to collecting data from direct sources.   

Procurement strategy: Which processes need to be automated as a priority?

Like every aspect of a company, a procurement strategy benefits from regular technological innovations, implemented as part of the digital transformation. The number of possibilities is constantly growing.

Despite these innovations, employees must have good analytical skills to deal with how to automate data processing using a "greatest common denominator" approach. Having multiple automation schemes with a very small number of operations, would be costly in terms of resources and counter-productive in terms of agility.

Procurement strategy: Are company employees aware of the value of data?

Digital resources alone are not enough to guarantee quality when collecting and processing data. The human factor is still a key factor in the drive towards a data-driven enterprise.

As a result, it is essential that a procurement strategy involves raising awareness of the value of data among company employees, as well as certain strategic service providers.

Procurement strategy: Can data be accessed by everyone involved?

To create a truly efficient procurement strategy, companies need more than reliable and rationally processed data. A fourth lever needs to be added to the digital approach: collective intelligence.

The good news is that technology is up to the challenge, offering companies secure IT systems that can be used to share data on a "need-to-know" basis. It is now up to companies to incorporate the goal of making data more accessible into their procurement strategies, which presents a challenge for both efficiency and cohesion.

When used effectively, data is therefore a real driver of growth that should be integrated into a procurement strategy.

To find out more about the positive impacts of digital transformation on a procurement strategy, take a look at the this article: "Digital transformation: Cost reduction of up to 30% for procurement departments"

 

[1] A transactional tool automates a company function or process (accounting, pay, production management etc.). In contrast, a decision-making tool analyses information from multiple sources.

[2] Harvard Business Review — Competing in 2020: Winners and losers in the digital economy — 2017

Notre livre blanc
white paper
Bring your rogue buying under control