How to Find Information to Supercharge Your Sourcing

Market Intelligence: How to Find Information to Supercharge Your Sourcing

How to Find Information to Supercharge Your Sourcing
Supercharge your sourcing!

By Connor Cantrell, The Hackett Group Strategy & Operations Consultant.

Gaining market intelligence is a recognised way to both develop and support strategic sourcing decisions that will ultimately pay dividends for an organisation. However, the ability to gather market, supplier and industry information that is both accurate and timely is a challenge many organisations face. Understanding the core components, and creating a library of tools and resources to effectively collect this information, will enable an organisation to promote a culture of informed decision-making and support efficient third-party supplier relationships.

Core Components of Market Intelligence

Three types of intelligence can be collected to optimise your strategic sourcing and business performance: market research, competitive intelligence and market intelligence. Market research covers a broad range of applications and techniques for gathering, storing, analysing and providing access to data, while competitive intelligence is the process of obtaining information for strategic purposes. Although, understanding and applying all 3 areas will ensure optimised decision-making, for purposes of supercharging a company’s sourcing processes, this article will focus on market intelligence.

Market Intelligence

Developing market intelligence includes elements of market research and competitive intelligence, but is largely defined by the process of gathering and analysing information relevant to a company’s supply markets, specifically for the purpose of supporting accurate and confident decision-making in the procurement process.

The potential benefits can be “bucketed” into 2 main categories: gaining external awareness and developing data to better support internal planning. It is imperative that an organisation has the ability to view the external marketplace in order to gather data on supply market capabilities, observe how the competition is developing and managing their supply base and supply chain, as well as understand key trends impacting or occurring within the market. On the flip side, it’s critical that an organisation effectively synthesises the external environment to refine internal product plans, identify competitive opportunities and execute enhanced sourcing strategies in support of the organisation’s stated strategy and business requirements.

The ability to simultaneously pair the external awareness capability with internal planning allows an organisation to effectively leverage buying power, which in turn will provide a competitive edge in the marketplace.

Market Intelligence: How to Find Information to Supercharge Your Sourcing

Library of Tools

While the benefits of market intelligence are visible and apparent, a common struggle for many organisations is finding pertinent information from credible sources. These difficulties may include: supply data for spend categories not readily available, biased information or a lack of knowledge on where to begin. Luckily, market research sources exist across multiple dimensions and avenues. There is not a “golden rule” on how to start or where to research. Several examples of sources and types of research are outlined below:

Market Intelligence: How to Find Information to Supercharge Your Sourcing

These resources are not all-inclusive, and as you define your research process, you can customise the process to fit your organisation’s needs and extend your reach. A great way to grow your resource base is to review known sources for additional material. For example, what sources are cited in a quarterly report on a particular commodity or service – where do they get their data? However, it is important to keep in mind not all of these resources will be in-scope. Also, remember to prioritise resources in a way that enables you to identify useful, timely research in a cost-effective manner.

Market Intelligence: How to Find Information to Supercharge Your Sourcing

Going Forward

Market intelligence allows category managers to make credible, data-driven strategic sourcing and supply base decisions by leveraging a wealth of market facts and data. We can’t do our jobs effectively without constantly staying abreast of relevant industry, market and competitive developments. If you want to test your knowledge on a particular commodity – go back to the home page of Spend Matters and type the commodity name (goods or services) into the search bar. See what comes up, who is publishing it, and what is happening that is relevant to your work. It’s a great starting point for developing your subject matter expertise!

In summary, it’s important to explore the plethora of resources available in order to categorise and tailor your research to meet the specific requirements of both your commodity/service and the organisation. Your team will increase its strategic sourcing capabilities and buying power by supercharging your market intelligence and continuously updating its market, industry and competitive knowledge to create value for the organisation.