In the first part of our blog series about the importance of data in procurement, we uncovered what data we need to store, how to clean it and process it. Now it’s time to reveal where to store and how to use the captured data.
Keeping clear and auditable data
It is important for businesses to know how to use digital innovation approaches to better understand how to use the captured data. According to techopedia, data storage is a general term for archiving data in electromagnetic or other forms for use by a computer or device. Several types of data storage play distinct roles in a computing environment. Besides hard data storage, there are now new options for remote data storage, such as cloud computing, which can revolutionise the way businesses access data.
We will outline below 3 benefits derived from maintaining procurement-related data in a comprehensive audit trail as an integrated part of the procurement processes.
1. Generates complete files
Most companies maintain a record of their purchases and are migrating all their records to an electronic format. Moreover, they are driving their customers and suppliers to do the same. Most of your procurement-related data may already be in electronic format and this will allow you to associate various documents with procurement files, and so keeping appropriate information together and easily accessible.
2. Drives efficiency
Having all your data stored in the same place helps you determine what changes were made to various files when they were made, or even who made them. Well-organized procurement data delivers a reliable but most important legally verifiable source of evidence for actions taken by your organisation over time. This data can also be used to make more informed decisions about the entire Procure to Pay process.
3. Catches relevant decision-making data
Procurement solutions allow you to explore your data and provide useful insights for the long-term spending patterns, by capturing procurement-related data. When you begin capturing detailed data about what you buy and whom you buy it from, how much you pay but also when you buy it, you can analyze that data and use it to improve long-term forecasting.
How to use captured data
Due to all novelties in automation, a data-centric approach can now even replace the tough information organisation processes that used to take a lot of time to complete. Further on, we will list three ways you can use the captured data.
- Keep track of changes. Data collection and analysis can be used to identify changing requirements and to also predict changes. It can also be used to improve customer service or even loyalty programs to eliminate errors and duplicate efforts in every part of an organisation. Captured data can also help bring in and link various elements to make predictions possible.
- Be competitive. There is no doubt that data is an important competitive advantage and a source of growth for businesses. According to The McKinsey Global Institute, data-driven organisations are 23 times more likely to acquire customers, 6 times as likely to retain them, and 19 times as likely to be profitable as a result. In a competitive environment, procurement departments can use captured data to continually compare past with present results to better prepare strategies for the future.
- Combining internal and external data to benchmark performance. In the era of big data, many procurement departments rely not only on their internal data but also on external data. “The really big opportunity is to combine your internal procurement data assets with relevant external data assets to benchmark performance against peer groups based on real data and in real time.” Spend Matters notes.
For procurement departments, information is key. We saw increasingly more procurement functions starting to make the best use of the vast amounts of data they gather. In today’s complex environment, CPOs are under pressure to deliver better strategic value to the business. By capturing the right data, storing it in the most suitable way, and using it so that it creates value for the business, procurement leaders can uncover new insights from data to use in negotiations and performance management.