If you’ve spent any time working in a procurement department, you’re well acquainted with the problem of silos. Perhaps you’ve tried to find supplier data or spend analytics, only to find that the data comes from more than one system and therefore is difficult to access or aggregate. Or perhaps you have insight into a key dataset, but that dataset is missing a column you need from another source that’s using a different program and can’t communicate via an application program interface (API). The struggle is especially apparent for global corporations that communicate not just across departments but also across countries with different rules and regulations.
Take it from the Trailblazers
Fortunately, world-class companies — the trailblazers in the industry — have found a way to break down these silos, even on a global scale. The Hackett Group has found that 82% of global world-class companies are already able to view “significant information available companywide” compared to 65% of average companies. In addition, 91% of regional and divisional companies are able to do the same. These companies are trailblazers, and with the right procurement tools, they’ll reach 100% spend visibility in the years to come as automation makes data capture easier than ever.
The Hackett Group, 2018 Benchmark Data
In addition to having this near-complete visibility, world-class companies are also leading the trend to use advanced business intelligence tools to identify new opportunities and track savings opportunities. These new tools for data aggregation give insight about the past, reducing costs by anticipating future behavior and making the procurement process more strategic.
Better Data Enables Strategic Procurement
Trailblazers have a few other key features in common. Namely, these companies:
Provide suppliers with self-service real-time visibility into the status of invoices and payments
Data formulated from 100% spend visibility as a foundation for supplier consolidation, volume ordering, and negotiating more favorable contracts
Process invoices in one day or less to get suppliers paid quickly
Use data to thoroughly vet and actively update supplier performance.
Procurement trailblazers use data to break down the silos that separate them from suppliers. Data provides procurement with information regarding suppliers’ key performance indicators such as cost, quality, delivery time, security, maintenance costs, and responsiveness. And when all this information is stored in one, central location, constantly updated in real-time, all departments can view the information when they need it, ensuring compliance and visibility across the supplier lifecycle. Plus, suppliers will have access to the real-time status of their invoices and payments. Armed with this information, they’ll have greater visibility into their cash flow.
Siloed information and a lack of visibility across an organisation can be frustrating. If one department is lacking visibility that another may have access to, employees are at a disadvantage attempting to create and review accurate analytics. How can they possibly make a prediction on a fraction of their company’s total data? They can’t. How can the business and supplier correctly account for their cash flow without real-time visibility into invoices? They can’t, either. That’s why procurement trailblazers are striving towards having 100%, company-wide visibility into all procurement data.
Better Data Fuels Emerging Technology in Procurement
Another way these companies use data is to fuel the emerging technologies that support the procurement process. This means data helps deliver tools that aid end users, tearing down the silos between the procurement department and everyone else.
One example is chatbots, which enable human-like interactions for a wide range of routine tasks. For instance, no human wants to be the one who spends all day looking up purchase orders or searching e-catalogs for goods and services, especially when a machine learning algorithm can do it faster and more effectively. Now that voice recognition exceeds human accuracy, it’s more essential than ever to take the lead on chatbots.
On a similar front, end users don’t want to dig through massive product catalogs to find the best product for their needs. To fix this problem, functionalities such as SmartSearch leverage intelligent algorithms to make the process far easier, surfacing the best products according to price, location, delivery reliability, and more — all while remaining compliant with company purchasing policies. End users can create rules so that the system always chooses the lowest priced item, or only picks preferred vendors, regardless of price. All options are updated in real time, so end users don’t have to constantly wonder if they’ve made the right decision. The algorithm does the heavy lifting, giving end users the ability to avoid slogging through a never-ending catalog to find the perfect product. What makes this possible? Data.
The Future of Data for Procurement Professionals
To help people adapt to and better prepare for these changes in source to pay, we created an in-depth report on 2019 purchase-to-pay trends to show where the future is heading.
In this report, we take a look at a day with data, exploring each stage of the purchase-to-pay process starting with sourcing and then moving on to procurement, accounts payable, accounts receivable, and finishing with how data supports the executive suite.
Ready to Learn More?
Data is the key for procurement and finance analytics and also does wonders for tearing down the walls that have historically posed challenges. To see charts and insights into how data will change the day in the life of procurement and finance professionals, download the 2019 reports below.