Reliable data is pivotal in the procurement process. Traditionally, high quality data has helped organisations maintain transparency and fairness throughout the supplier selection process. This helps ensure that bias and corruption have no room to flourish, as well as driving efficiency.
Increasingly, the more strategic and digitally-driven nature of the procurement function is leveraging big data into more valuable insights. Big data analytics powered by artificial intelligence (AI) are vital when it comes to identifying risk. Analaytics also also critical to predicting trends in complex systems, optimising sourcing strategies, and reducing costs through efficiency.
However, advanced data analytics are heavily reliant on the quality of the data used to fuel decision-making. The same is very much true for AI, machine learning, and automation. Unfortunately, data quality is an area where procurement teams have historically struggled. Obscurity beyond the first tier of suppliers, siloed information, and even having too much irrelevant data can all undermine the quality and usefulness of your company’s data.
How do we get better procurement data?
Better data can drive a more strategic, digitally empowered procurement function. In order to get that data, embracing better principles of data collection can be an effective start.
First, procurement needs to standardise the ways it reports, collects, organises and stores data. This helps ensure data integrity and quality. Standardised data collection also helps define clear processes and classifications across the organisation. Procurement sits between the organisation and the supplier ecosystem. Therefore, it has the potential to be a major repository of valuable data and even more valuable insights. However, procurement needs to organisae that data in a uniform way. Adopting a common taxonomy can facilitate data reuse, eliminating redundancy and promoting consistency across sources for more accurate insights.
Once data has been standardised, uniting internal and external information, ensuring that the information is accessible is vital. Data that is readily available and digestible fosters a culture where information drives decisions. A centralised, transparent repository where trustworthy information can be readily accessed to support decision-making creates a more agile, resilient procurement function.
Providing access and training for analytics tools empowers employees with data manipulation skills, while central storage enhances information retrieval. Access controls can safeguard sensitive data, and department-wide cybersecurity training (with regular refresher courses) can help identify red flags and prevent vulnerabilities.
Lastly, choosing the right data is more important than what you do with it. For efficient procurement strategy execution, understanding organisational goals is a vital step to guiding data collection.
