The document discusses the use of procurement analytics. It begins by explaining what procurement analytics is and why organizations should use it. Analytics can increase demand forecasting accuracy and contract negotiation power. The document then discusses how analytics can be applied in areas like vendor evaluation, spend analysis, and demand forecasting. It also outlines challenges to implementation and provides recommendations for next steps like gaining leadership support, collaborating cross-functionally, developing skills, and integrating systems.
7. Source: Competing on Analytics: The New Science of Winning (Davenport / Harris)
What?
CompetitiveAdvantage
Sophistication of Intelligence
Optimization
Predictive Modeling
Forecasting/extrapolation
Statistical analysis
Alerts
Query/drill down
Ad hoc reports
Standard Reports
“What’s the best that can happen?”
“What will happen next?”
“What if these trends continue?”
“Why is this happening?”
“What actions are needed?”
“What exactly is the problem?”
“How many, how often, where?”
“What happened?”
Predictive
Analytics
Descriptive
Analytics
Analytics Sophistication Levels
WHAT WHY HOW
24. Next Steps
Organisation
Leadership – gain support
BUs – collaborate, share
Skills – develop, hire or share
Culture – fact-based, not just gut-
feel decisions
Process
Embed analytics in processes
WHAT WHY HOW
Systems
Short-term – integrate, consolidate
& fully utilise existing systems
Long-term – invest in an
eprocurement suite and
specialised analytical tools