Written by Adrienne Cochrane
Historically, despite its potential to gain a more strategic role in the organization, procurement does not manage even 50% of enterprise spending (according to KPMG). Why is that?
Procurement teams tend to focus on the largest and inherently visible costs, where their influence will have the most impact. To analyze “longer-tail” costs is a tradeoff of time and resources in which teams must estimate the return on their investment in wading into murkier non-managed spending (especially in light of the opportunity costs involved).
The question, of course, is why are procurement teams forced to estimate this tradeoff? What, exactly, are the opportunity costs of analyzing longer-tail costs? And for the 50% of spend that is being analyzed, is all of the relevant data quickly and easily accessible?
The answer to all of these questions lies in the “procurement data bottleneck” — the recorded webinar you can view at the top of this page.”
The procurement function generates billions of pieces of spend data annually, which is spread throughout the organization and often difficult to locate, categorize and maintain. As a result, sourcing managers find themselves spending more time preparing the data than working on the actual analysis.
The challenge of managing this kind of disparate, messy data has become a top priority in the big data era. In response, advanced unification and preparation methods have emerged to eliminate the data bottleneck for business users who need faster answers to critical questions.
Procurement leaders that leverage these technologies see benefits such as:
- A single unified view of parts, supplier and transaction data
- More spend under management (90%+) and more annual savings (a 15% increase) without adding headcount
- Better collaboration with internal business partners, such as finance and engineering
The best procurement organizations make it a strategic priority to streamline how they locate, manage and maintain data, so they can generate insights and savings faster than their competitors. Organizations that are able to prepare for business-critical discussions in days instead of weeks benefit from better decision making and reduced supplier risk, and increased savings.
To learn more about these strategic approaches to sourcing and spend optimization in procurement, register for a live demo of the Tamr procurement analytics solution.