Generally, procurement is described in long and technical ways – something along the lines of: “the process of collecting and analyzing procurement data to form meaningful insights and aid effective business decision making.”
We at Sievo want to change this. Although it challenges the general belief, procurement analytics can actually be described in quite many exciting ways.
That’s why we made a video explaining what procurement analytics is – but in a fun way! Watch it below.
A lot of people agreed with us – life and procurement should not be taken too seriously! As a response to our video, we got some more smart (and fun) definitions of procurement analytics from other smart (and fun) experts on Linkedin and Twitter. This subject of changing the way we talk about procurement analytics seemed to be close to the hearts of many since we got heaps of amazing answers from everyone rushing to participate. Here are some (14 to be precise) of the most creative ones.
So… what do California, an Indian wedding, and tequila have to do with procurement analytics?
1. Sarah Scudder, president of Real Sourcing Network, compares it to buying a house in California. “Before spending a ton of money (aka house prices here are insane), I want to have lots of information to pick the right house to buy. I want to know about traffic, proximity to the airport, quality of the school districts, crime, noise, major employers in the area and how close I am to a gym.”
2. CEO and founder of iDDea, Ingrid De Doncker, says we are looking for gold. “Like the old cowboys in the Wild West! If you have the right skills and tools and patience to pan for gold, you will be successful. You will know how, where and when to find those gold nuggets. You filter the dirt and gravel out of the pan, over and over again, until flakes of golden data turn in to golden nuggets of insight! It does not come easy, it is hard work but if you keep at it, you will get what you are looking for...”
3. Procurement doctor Karthik Rama came up with an intriguing example of an Indian wedding. “Imagine there's a wedding in the family and you intend to invite 800 people for the wedding...this happens a lot in India. Who would you refer to best understand the estimates and to understand how to best execute the wedding without any hassles or trouble? We typically would have that one elderly uncle or aunty or grandma or Grandpa who know how much it would cost to prepare for a wedding, as they have helped a lot of weddings during their lifespan. Where to go and who to reach out to for the floral decorations or food caters extra. Procurement Analytics is like the elderly uncle or aunty or grandma or Grandpa who has the history and knowledge of the market to help you make better buying decisions.”
4. Emil Malmsten, the source to pay operations lead at EY, uses something we all love in his explanation – pancakes! “Procurement analytics is the basics of e.g. financial stability. It happens in small batches in everyday life too! E.g. Do you go for famous international brands or the cheaper local supermarket brands when deciding on the ingredients to the pancakes (lettu's)? Maybe your choice leads you to getting jam too! ;)”
5. How about Ms Category Management Dana Small's comparison? This you can relate to. “It’s knowing that if there’s a potential shortage of agave plants in Mexico, you should stock up on tequila before prices skyrocket!”
6. Strategy director at Prophetic Technology, Dave Food, explains it with something we all deal with on a daily basis - receipts. "Procurement analytics, knowing all your receipts for any historical period analysed any way you want to analyse them: by supplier, by team, by product, by geography or any other combination."
7. Dustin Cochran, managing director at Omnia Partners, compares it to Pokemon Go. "By using technology you can interface with your world (your data) in ways you maybe only dreamed of. Adding a level of engagement impossible with only a 2-D view."
Procurement analytics can help prevent family feuds and empty fridges.
8. Purchasing coach Alison Smith compares it to planning your family meals for next year. “You’d need to understand what you spent last year, what you made last year, what went down well, what didn’t, who provided great quality ingredients, whose produce went off too quickly, how much food was wasted, what recipes you want to try in the future, any special occasions coming up, what ingredients you’ve got in stock, potential sources for the ingredients, new ingredients coming along and so on and so on. Imagine having an app on your iPad that makes sense of all that data to help make better choices and tastier meals, and still keep within budget. (I.e. No scribbles on a piece of paper, notes in your diary, recollection, and reconciling receipts). That’s analytics. Procurement analytics is just doing that for everything an organization buys.”
9. Donna Wilczek, VP of product strategy at Coupa, shows how crucial it is for a family. “My mom was a coupon queen and lived for analyzing household spend, food deals, and finding opportunities to save. Growing up, our family wouldn’t have had food on the table if it wasn’t for her procurement strategies”.
10. James Marland, Global vice president, centre of excellence for spend management, SAP Ariba says you can ask your mum: “Mum, you know how you get to the end of the month and wonder where your pension all went? Big companies, with all their fancy computers, often ask the same thing. Helping to answer that basic question, that’s Procurement Analytics”
The explanation to procurement analytics can also be extremely short and sweet.
11. Helene Laffitte, the CEO of Consulting Quest: “Procurement Analytics is a visual user-friendly way to present why, how and with whom we spend our money.”
12. Principal advisor at Procurious, Helen Mackenzie: "What, when and where you've spent things on a funky dashboard.
13. Sara Evans, managing director at The Respectory: “I’d say something about knowing what the heck is going on so you can better know what to do.”
And to give you the final, conclusive explanation...
14. Kelly Barner, the Procurement & Supply Chain writer and influencer: “From my perspective, procurement analytics is the practice of allowing data (spend data, supplier data, market data, forecasted demand data) to inform enterprise actions regarding contracts, suppliers and purchases. Sometimes it is as straightforward as knowing how much are you spending in a product/service category and allowing that to inform sourcing strategy, and other times it is understanding dynamics in two or more of the types of data listed above and allowing that to inform overall spend management strategy.”
*Drops the mic*
Now we’ve seen a ton of different explanations of the same thing. How would YOU describe what procurement analytics is?
Thank you so much to everyone who gave comments and awesome definitions! This is a good start (if we do say so ourselves), but we're still not satisfied with our quest to change the way we talk about procurement and procurement analytics! So stay tuned... there is something new coming later this year explaining the subject in a completely new way once more! ;)