The pandemic has affected data management and analytics in many ways. One of the biggest changes is that we’re now actually seeing the plans for better and more robust data as major part of the procurement process being developed into reality. For years, procurement teams have talked about wanting to make data-based decision making a much larger part of their everyday processes, but that a lot of that talk has been just talk. One of the few benefits of this crisis is that organizations have asked procurement teams to do more and be more than they ever have in the past. Many teams have discussed how the pandemic has pulled them into meetings and responsibilities that they hadn’t been tasked with previously. Because of this, the need for better data has come into the spotlight as a key enabler of these shifting procurement responsibilities. This subject was the topic of a recent webinar hosted by Procurement Leaders in conjunction with our partners at Jaggaer. You can watch the recording of that webinar here.
In our 2021 CPO Planning Survey, we asked leaders what they’re top priorities were going into the next year and one of the top priorities was driving organizational efficiencies through technology. This recognizes that long-term value creation is linked to the ability to form data-driven recommendations. Those same survey respondents said that over the next year, teams will continue to focus on process governance, standardization, and automation of transactional tasks as a first step to bringing data to the forefront.
Taking the first steps
In many instances, organizations look to start with the technology as the first step towards better data. A common thought process is ”there’s a great piece of technology that sounds like something we need…lets’ go buy it!”. In reality, the first step needs to be focused on developing a data strategy:
- Focus on building a data driven culture. There needs to be an understanding of the importance of data, what problems it can help solve, and a plan for achieving one source of truth.
- Identify the opportunities, objectives and responsibilities. The who, what, how, and when of the overall data strategy and responsibilities of those involved
- Understand your data. Before rushing out and buying a technology, take the time to delve into the data you have on hand to discern where the data is housed, what’s in the data, what’s missing from the data, and develop a plan for the best use of the data
- Find the right tool. Use your knowledge of the opportunities, objectives, and the data itself to find the right tools to fit your needs for today as well as for the long haul.
Talent is always key
As teams build out their data capabilities, focusing on the right talent to help bring the value of those capabilities to life is a very important step. The most important thing here is to make sure you’re aware of what your business really needs. A couple of years ago the big move was to run out and get a data scientist who would solve all of your analytics needs. That didn’t work out so well as most teams did not need a data scientist level of expertise to achieve their goals. To avoid mismatches like this in the future, you need to understand your data or at least what you want from the data. Most likely to get to where you want to be, you’ll need someone who is more adept at synthesizing data and providing insights than someone to run regression models and statistical analysis.
When you talk to companies succeeding in this area, they consistently point to the need being a mix of skills that are rooted in digital capabilities, but enhanced by soft skills. So, yes you need people with great digital literacy and analysis skills, but 100% of the respondents in our CPO Planning Survey listed a collaborative mindset as a must have skill for their digital teams going forward. It’s focusing on bringing in and nurturing this kind of talent which is going to be the make or break for successful teams.
Procurement’s success depends on data
Data can’t be the only element of your decision making process, but it needs to be a very important one. There is no major decision that should be allowed to happen within your organization that does not take the data into account; this really goes back to creating a data-centric culture. If you can establish that culture and implement processes that recognize data as an important piece of the puzzle then making informed decisions is the natural by-product of that.
It should be apparent that the future is going to be data-driven and that is exactly what our community has told us about 2021 and beyond. 89% of procurement leaders think that data is important to decision-making processes within the organization, but only 41% say they are currently using data effectively. That is a big gap and the next few years will be really focused on closing that gap and expanding not only data capabilities, but confidence in the data and reliance on the data.