Data-Driven Procurement: Strategies, Training, and Implementation

Modern procurement strategies are becoming more and more intertwined with advanced data practices. This data-driven revolution is transforming the way businesses think, allowing them to generate advanced insights across their entire supply chains and save costs at every step.

Companies need to invest in a data-driven procurement strategy to make sure that they don't get left behind by their competition. As the technological landscape continues to evolve, these processes will become even more valuable, so having skilled employees who are constantly training in the latest technologies will only benefit organizations.

We're going to take a look at how data is transforming procurement, how you can begin to implement it, and what challenges you might face along the way.

Understanding Data-Driven Procurement

Looking to make a change in your procurement processes? The first place you should look is at your data. Data analytics and advanced technologies like artificial intelligence (AI) and machine learning are at the heart of modern procurement. Using the data generated by these allows businesses to make informed, data-driven decisions.

Data can give you valuable insights into supplier performance, market trends, purchasing patterns, and a variety of other metrics. It can help drive cost efficiency by identifying preferred suppliers and by helping to appropriately manage inventory levels.

Data also plays a vital role in reducing risk and building supply chain resilience. Supplier disruptions and geopolitical risks can be identified early through data analysis so mitigation plans can be put in place.

Developing Procurement Strategies Aligned with Data Insights

Considering the importance of data to procurement processes, you must build your procurement strategies with strong data collecting and analysis practitioners in mind. Aligning your procurement strategies with data insights allows you to better identify opportunities around cost saving, risk mitigation, and performance optimization.

Data can positively influence different areas across the entire procurement process, including:

• Demand forecasting
• Supplier selection
• Contract negotiation
• Inventory management strategies

Investing in appropriate data collection and data analysis technologies early will help your procurement processes strongly align with your data insights, while also developing a culture that's built around making data-driven decisions. This data can also help your business iterate and change to adapt to new challenges and opportunities — all while being backed by guiding data.

Implementation of Data Analytics Tools and Technologies

Using data to guide your procurement decisions is important, but maybe you're wondering what the best way is to start implementing data analytics into your existing processes.

The first thing you need to consider is what tools and technologies you want to use. Think about your organization's specific procurement needs, research the available tools and check for compatibility with your goals. on't forget to check for key considerations such as:

• Scalability
• Overall functionality
• Ease of use
• Compatibility with existing systems

Once you've selected your tools and technologies, there are three key steps you'll need to follow: integration, deployment, and optimization.

Integration allows your teamwork to fit new tools with existing technology and processes. You may need to connect it to various databases or platforms you're already using to begin generating data.

Next, you'll deploy the analytics tool and begin to develop insights. Training and employee support are vital here, as you'll need to make sure all relevant employees are comfortable using it to its full capabilities.

Finally, once the tool is deployed and working effectively, you can begin to optimize. Here, you and your trained employees can work together to figure out the optimum configurations and workflows to maximize the data analysis.

Overcoming Challenges in Data-Driven Procurement

Of course, developing a robust, data-led procurement process won't always be easy. There are several challenges your organization may have to overcome along the way.

Data silos — where data is stored independently across different teams and departments — can make the procurement process extremely fragmented. Data analysis works best with full data sets, and having to draw this from multiple locations and systems will slow down the process and ruin its efficiency. This can be solved by implementing company-wide data storage policies and through investing in a robust data storage network that can handle everything natively.

A lack of advanced skills amongst your team can also pose problems for procurement. Data analysis, while heavily dependent on technology, still requires people to run and work with the insights provided. You need to invest in upskilling your team to keep them on top of new technologies and best practices. Skill Dynamics has years of experience working with procurement specialists to train and upskill — why not take a look at our course catalog to see where we could help your team?

Addressing these challenges early can help you avoid potentially costly roadblocks further down the line. Advanced planning is key in developing a truly data-driven procurement process.

Training for Data Literacy and Analytical Skills

We know you'll no doubt want to keep your procurement teams trained to the highest level, but figuring out exactly what areas to upskill them in can be a challenge. Two areas we often recommend companies focus on are data literacy and analytical skills.

Data literacy will allow your team to better understand the data that's being generated for them, leading to more informed decisions and stronger business outcomes. Trends and patterns can be identified quicker, potentially giving your business an edge.

Analytical skills complement data literacy by helping procurement teams identify cost-saving opportunities or potential risks earlier. This gives workers the confidence to make insightful decisions based on the data they're seeing, once again leading to better business outcomes for the company.

To develop these skills — particularly relative to procurement — highly specialized training programs are needed. The topics covered need to relate to very specific skills, and shouldn't be over-generic.

At Skill Dynamics, we pride ourselves on offering fully bespoke courses designed specifically with your team in mind. We provide Skill Gap Analysis to determine where best to upskill and offer a self-paced eLearning approach that's designed to increase engagement and knowledge retention.

Conclusion: Driving Procurement Excellence Through Data

Procurement processes that are based on advanced data are essential to driving performance at high-powered businesses. Organizations need to take a strategic approach to implementing advanced data analytics though. The correct tools and technologies need to be chosen, and staff need to be exceptionally well-trained to make the most of the data being generated.

Take a look through our wide-ranging course catalog to see our full suite of procurement-related training courses. If you like what you see, get in touch today to discuss how we can take your procurement processes to the next level by developing world-leading data skills.