Visibility is one of the most important pillars of the procurement business as it is a proxy to making informed decisions.
In this data-dependent world, those without the ability to quickly access and interrogate data are significantly disadvantaged. When it comes to truly understanding a business, a lack of visibility into accurate data will most definitely hamper informed decision-making.
In relation to procurement or Source-to-Contract (S2C) upstream procurement, business leaders must have visibility into the company's spend, sourcing, contract and supply chain data. This transparency is critical in normal market conditions, but it could mean the difference between business survival and closure during this unprecedented crisis.
To ensure complete visibility into your Source-to-Contract (S2C) processes, be sure to understand the following four key factors:
1: Spend Data Management: How to make your data trustworthy for full spend data visibility
While ERP solutions do provide reporting, the data outcome is only as good as the data source. Where multiple ERP solutions are being used, multiple reports need to be collated and homogenized for a global view. In both scenarios, outdated and inaccurate data is often the result.
Typical spend data challenges:
- Multiple ERP solutions providing various fragmented data sources
- Different taxonomy systems being used across different business units/countries
- Poor and missing invoice data
- Lack of purchase orders
- Relying on incomplete data from fragmented sources
Relying on untrustworthy data can be just as bad as not having visibility of data. A Spend Analytics solution can pull data from multiple ERP sources and cleanse, enrich, categorize and homogenize spend data to give organizations a comprehensive accurate view of global spend data. A user can slice and dice the data by including multiple dimensions, using search and filter options, and applying multi-level data drill-down to gain visibility into savings, aggregation and consolidation opportunities.
In the current crisis, Spend Analytics technology can be used to identify spend in all none-critical categories enabling necessary cutbacks to be made.
2: Sourcing Project Data: Get immediate access to all sourcing data in real time to make data-driven decisions quickly.
Conducting and managing sourcing projects manually means that all the relevant data, including supplier responses, pricing and relevant project messages are spread across several locations, usually within separate files and emails in folders on shared drives. Even if all the information is stored correctly it’s difficult to get an overview of the data without spending significant amounts of time collating and summarizing it.
Typical sourcing data challenges:
- Fractured data due to manual processes
- No access to live data and completed sourcing events
- Lack of data sharing across teams
Having access to live and completed sourcing events offers an overview of your team's progress against the annual workload plan and targets. Drill down data is a necessity for procurement to reflect on performance and improve processes. Examples of what this data should cover includes:
- Number of sourcing events done in total, per buyer, per department, per category, etc.
- Number of suppliers who participated
- Shortlisted suppliers
- Savings generated
The lack of visibility of trends within certain categories can prevent time-sensitive value maximizing strategies from being deployed when it counts. By digitizing the strategic sourcing process with Source-to-Contract (S2C) technology, organizations can get immediate access to all sourcing data in real-time, in order to view, analyze and interrogate data. This provides visibility of the status of all planned, live and completed sourcing projects, as well as the results at the intra- and inter-level.
Having immediate access to intra- and inter-level sourcing event data is key when it comes to evaluating and enhancing sourcing processes, tactics, and strategies.
3: Contract Management: Improve document, clause and metadata visibility and easily monitor contracts.
Contract Management solutions make the process of storing contracts and recording metadata quick and easy to easy to monitor and drive. As a higher percentage of documents are uploaded and metadata recorded, visibility will be significantly increased. As the contract process becomes digitized, the data will be much easier to interrogate, report on and analyze against any relevant metrics.
Typical contract management data challenges:
- Low internal compliance means missing contracts and metadata
- Flat files held within shared folders are difficult to search, filter and report on
- One dimensional data with no overview and no contract expiry reminders
- Difficulty tracking supplier performance against key clauses
Storing contracts on a shared drive and keeping track of contract metadata in a shared spreadsheet often results in low internal compliance. Therefore, that contract data is significantly lacking in quantity and quality with poor overall visibility of contract data leading to difficulties in:
- Understanding your exposure
- Monitoring supplier performance against key contract clauses and SLAs
- Avoiding costly contract over-runs
- Segmentation of contracts (by contract manager, business unit, category, criticality, etc.).
Your business will garner the much needed visibility to make relevant cutbacks and maximize savings by having the ability to quickly and easily report on all contracts and being able to see which non-critical contracts are due to expire in the coming months.
4: Supplier Management: Manage your suppliers more effectively so they don’t manage you.
Supplier Relationship Management (SRM) solutions streamline and automate the process of gathering supplier data as well as prompting/forcing suppliers to comply. Once supplier data has been received, the buying organization can quickly and easily interrogate the data across any metrics. In addition to running reports, most solutions will notify the relevant team member (and supplier if required) when there is a noteworthy data related incident (i.e. key data has changed, key document has expired, etc.).
Typical supplier data challenges:
- Storing supplier data across multiple documents in shared folders makes reporting difficult on both the inter-and intra-supplier level.
- Lack of supplier compliance data means your team cannot easily monitor or drive supplier compliance.
- Manual processes of gathering, collating and analyzing needed supplier data makes it difficult to respond quickly to unexpected supply chain challenges.
An SRM solution will be able to quickly release a COVID-19 Supply Chain Disruption questionnaire to all suppliers to collect the relevant data and then interrogate the data to identify and understand gaps within their supply chain (by category or level of criticality) and make informed decisions on how to best mitigate against the disruption.
Visibility of your procurement processes and data have never been more important. Having Source-to-Contract (S2C) technology can quickly give your organization that visibility.