“Big data” and “analytics” are the buzzwords of the day. Or as our friends at Ardent more concisely say, visibility”. From the solution provider’s perspective, the challenge of delivering on the promise of visibility requires plenty of hard work, collaborating with customers and, frankly, a little trial and error. Prioritizing which critical areas to enable is more often than not the key decision a solution provider must make. Which brings me to this article that I found to be an informative asset as we at Selectica continue to build out our analytics solution. Informative to me as an affirmation of procurement’s priorities and I expect informative to all those seeking to drive corporate initiatives.
The three findings cited by Ardent Partners in this article clearly lay out a case for investing in visibility so that Procurement can have the INSIGHT it needs to act. Ardent introduces three areas of visibility as leading indicators of a procurement organization that is achieving or tending towards best-in-class performance. Combined, these indicators are a clear road map for success, putting aside whether you are seeking to be best in class or not.
Now, there is always the chicken and the egg question. Does visibility lead to success (or best in class) or vice-versa? In my experience, the answer depends on the organization, its history and culture. But one thing is clear, the more visibility the greater the chance that the organization will be moved to action. I often think of visibility as the crucial first step to spur an organization to enhance a process, change, or just plain make decisions. In the age of risk mitigation, this visibility could even come from an event that does not directly impact your enterprise, opening the eyes of key stakeholders. Today, the leaders are those who act based upon visibility without having to wait for the board, the CXO, or the press and customers to say it’s time to act. The leaders are those who create visibility so that they can act.
As I was digesting this piece from Ardent, it struck me that the three areas of procurement visibility (Spend, Savings, and Risk) are saddled with different obstacles on their journey to achieve and each has a different recipe to close the gap and gain insight. However, all three ultimately require accuracy and completeness of the underlying data and getting to that clean data is often predicated upon improved business processes, typically technology enabled.
The three areas that Ardent lays out very much follow an analytic maturity path for procurement. In my experience, this path is reinforced by process and data maturity that when confirmed by the wider enterprise grow the organizational credibility and mandate of procurement. If you are not managing spend then you can’t track savings. If you aren’t able to systematically document the impact of the procurement organization, demonstrate an ability to tame the data beast and successfully implement a technology solution, how could the procurement organization be empowered to take on the challenge of managing risk (in all its forms)?
We’ll end here for now. But there will be follow-on installments in this series that discuss the challenges and paths to success for each of the three critical areas that Ardent identified for Procurement visibility — namely, Spend, Savings and concluding with Risk.
* Download this paper to learn how Procurement professionals are demonstrating value to their organizations by reducing costs and increasing profitability with spend and sourcing systems that share savings information with financial executives and other lines of business.