Building a nimble process, speaking the right language and gathering your data from the right sources will have you nailing a flawless data strategy in no time!
When most procurement professionals think about data they imagine a darkened back-office room and a huddled group of silently-working number crunchers.
But it’s data that gives your organisation’s senior leaders the most important insights, helping them to win new business.
Data can help procurement climb up the value chain and earn you a seat at the table.
If could only change the time we spend gathering data and the time spent actually using it from a 80/20 split to a 20/80 split, its potential is limitless.
And this is a mistake procurement makes too often.
Ahead of today’s webinar Basic Instinct: Are You a Data Hunter or Gatherer, we’ve outlined some top advice from data experts; Marco Romano, Procurement Chief Analytics Officer, Global Procurement, Transformation Technology – IBM and Edward D. O’Donnell, Chief Data Officer for Procurement – IBM, on how to dominate your data!
1.Build a nimble process
Ed has, in his own words, enjoyed ten years working in transformation but admits he has made plenty of mistakes along the way! His advice? “If you’re going to fail. Fail early.”
As he points out, making mistakes is not the problem, it’s the way it’s done that makes all the difference, “The most significant challenge [for procurement pros] is managing data of all size and scale.”
In the past, IBM have approached this challenge with the old-school waterfall methodology; the development team is engaged and a plan is might be made and executed with care over the course of a year.
“It’s smarter if you can do it in more agile chunks,” explains Ed. “The drops are not quarterly or annually for the big bang but rather maybe in weeks we’ll run sprints.”
“This allows smaller, more manageable content.” Which, of course makes a lot of sense. Why spend a whole load of money to wait for the last two months of the year to realise the value? “Can’t we build a process thats more more iterative, more nimble, more flexible more agile?”
“Then, of course, if the client doesn’t like it we can get immediate feedback and correct it straight away.”
2. Use your time more wisely
Procurement pros have, for too long, been gathering data from too many sources because that’s what they think they should be doing. It’s time consuming and, often, it’s also futile.
“So much time spent is spent gathering data. Procurement pros need to start at the end and work backwards. First and foremost you need to ask what’s the outcome or insight you’re trying to achieve and what are the business behaviours you’re trying to change.”
Develop a joint understanding of business requirements. From that you work backwards to determine three things:
1. What data you need
2. How you acquire it
3. What enrichment that data needs
In doing this “you’re not only gathering data that’s fit for purpose, you’re also considering business process that drives that data and building improvements into this process to ensure data quality and data consistency.”
“Of course it doesn’t stop there our role is to automate that takes gathering filtering, sorting data away from practitioners
Ideally we don’t want our practitioners spending time analysing or shipping raw data rather looking at results or process insights. but spending time
So what drives this behaviour off trying to get all sorts of data?
It’s driven by wrong metrics or misunderstanding of those metrics.
“You absolutely have to make sure you measure what really matters, such that you drive the right behaviours in data acquisition and move away from concept where people are just acquiring a whole lot of data and not able to put it to good use or understand why they’re acquiring in the first place.”
3. Gather your data from the right sources
IBM source their data from a wide variety of sources.
“We look at RFX data, procurement and customer contracts, internal client demand and pipeline data,” explains Marco. “Internally it’s a very broad base of data which includes procurement and our clients.”
They use “market intelligence from MI providers as well as MI from structured and unstructured public data sources, social media and various other sources.”
“The data we get from suppliers is really important and includes things like machine failure rates, product life-cycles [and ]configuration options.”
“It’s a broad base but it’s not about gathering all of that data but rather targeted to achieve a specific objective.”
Do IBM have a particularly ‘hot’ data source? “Not so much the hot data source” says Ed. “It’s the way you use that data!”
“assembling the data in a coherent way where the buyers can have it at their fingertips – assembling quickly, linking the data and then presenting it to the buyer in a new user experience is where the power comes from.”
4. Listen to your client
“Listen to the voice of the client” says Marco.
“Start with an understanding of what you’re trying to solve, really understand what the practitioners needs are and work backwards from there to figure out what you really need”
Set up engagement meetings, engage with the client regularly and continuously share and showcase your work with your internal team.
5. Focus on data quality
“Focus on data quality and ensure that your procurement processes enable the acquisition and enrichment of good quality data,” says Marco
“It sounds very obvious but it is so often overlooked and it causes tremendous frustration in the system.”
6. Speak the same language
Spending more time in front of our customers or clients and less time behind closed doors, simply gathering and analysing data, is crucial.
When procurement teams start a program it’s important that everyone is on the same page; speaking the same language and communicating regularly with all the key stakeholders.
“One of the things historically that the procurement practitioner hasn’t done so well is being completely transparent with the data,” explains Ed.
It’s important to present it in a way that “it’s clear and simple to understand [and so] that the outcomes are obvious. The best chart is one you don’t have to try to understand, where the messages are clear.”
If you’re referring to units per hour, what do you mean by units?
If you use the term FTE, does everyone know what exactly that represents? Is it a 40 hour week at x cost or a 35 hour week at y cost?