Hey Procurement Legend, here are some thoughts about Data and Procurement Tech over the last few years.
I’ve also gone all in on definitions and context for you if your knowledge of Digital Procurement and Procurement Tech is low. After reading this, you’ll be in a good place to push on your knowledge.
Enjoy.
I consider data to be the secret weapon of Procurement Tech. But we have a chicken and egg conundrum here.
Procurement Tech could be seen as the vehicle; the data it needs and utilises can be the fuel.
But, before you get Procurement Tech, your data usually sucks.
So, we find ourselves in a position where we need good data to fuel the tech we want or have, but we haven’t locked down a method to get good data.
Data provides many advantages to us Procurement Pros (here’s a few that I’ve summarised):
So here’s how you can use data, collect better data, and fuel your Procurement Tech as you transition from a non-digital set-up to a digital procurement set-up.
What is Procurement Tech?
More of you wanted content on Digital Procurement.
And Procurement Tech, which is the software platform that enables you to do procurement digitally, is fundamental to Digital procurement.
Procurement Tech can cover a vast amount of different categories. I’m working on creating a visual that makes this clear. There are a lot of good maps out there, but they can get noisy, so for now, here’s the World of Procurement Procurement Tech Stack Table:
I’ve got a lot more work to do around this, but for now, I hope it gives you some insights into the types of Procurement Tech out there. More important for you is how these connect to make a Procurement Tech Stack.
Benefits of Procurement Tech:
Challenges to Consider:
This largely follows the Process, People, and Technology synergy, but I wanted to frame it slightly differently.
But whilst we’re on Procurement Tech, I’ve mentioned Digital Procurement. This is how I see Digital Procurement versus Traditional Procurement:
One common area I hear people complain about is poor engagement with the business or being left out of decisions. Almost everyone who claims this is from the Traditional Procurement camp.
What is Procurement Data
Procurement data refers to the information that encompasses the entire purchasing process within an organisation. This can include details on suppliers, products, pricing, quantities, delivery timelines, and more.
It’s vast, scary, and incredibly powerful. Within Procurement Tech, at least the good tech out there, every piece of data becomes a piece of fuel that allows you to do something. For the best solutions, you’ll create automation around data so that your tech is working whilst you’re sleeping.
The Challenge of Good Data Before Going Digital
While digital procurement technology can significantly streamline the process, a procurement professional can still gather valuable data about suppliers, contracts, risks, and relationships through more traditional methods.
If you’re in the Traditional Procurement camp, you could collect more and better data by doing some of these:
Supplier Information
Surveys and Questionnaires: Distribute these to suppliers to gather relevant information.
Interviews: Conduct in-depth interviews with suppliers for insights into their capabilities.
Industry Reports: Access reports and publications that provide insights into supplier performance and reputation.
Site Visits: Visit the supplier's operations to assess quality, compliance, and other factors.
Contract Data
Manual Review: Regularly review physical or digital contract documents.
Track Milestones: Use spreadsheets or simple tracking tools to monitor contract milestones and obligations.
Liaison with Legal Teams: Collaborate with internal or external legal teams to ensure contract compliance.
Risk Management
Risk Assessments: Carry out manual risk assessments, considering market conditions, supplier stability, compliance, etc.
Monitor News and Market Trends: Regularly follow industry news, government regulations, and market trends that might influence risks.
Consult with Experts: Engage with risk management experts or consultants as needed.
Relationship Management
Regular Meetings and Communication: Maintain open communication channels with suppliers through meetings, calls, and emails.
Feedback Loops: Implement a process for both parties to provide and receive feedback.
Relationship Mapping: Maintain a record (possibly in spreadsheets) of contacts, interactions, and relationship statuses.
Collaborate Across Teams: Coordinate with internal teams to align expectations and improve supplier relationships.
The key to the above is extraction. When you have calls you can record them and use transcripts to search for data.
With contracts, you can make a contract review document and store the relevant data for each contract reviewed.
You could create databases full of the thoughts you capture along the way.
Do the best you can at storing the information and focus on this as a priority.
But there are severe challenges to doing this.
Time-Consuming: These manual processes can be far more time-intensive.
Accuracy Concerns: Without automated tools, there may be more room for human error.
Scalability: Handling large numbers of suppliers and contracts manually can become unwieldy as the organisation grows.
These challenges should not put you off, though. If you don’t have any Procurement Tech, this will be the only way to start collating, harvesting, and utilising data. The good part is that you will have an incredible start when you move into Digital Procurement and utilise Procurement Tech.
And to be crystal clear, it’s a good start because you can use this data in the procurement tech you bring in.
This is a good question you should pose to any would-be procurement tech supplier you’re looking at: What data can I track, store, extract, and do stuff with in your platform?
I know how painful having crappy data is.
When I last implemented Procurement Tech, I realised the data the Procurement Team collected was poor, unreliable, and untrustworthy. I spent two months of every moment outside my main tasks and obligations sifting data, cleaning it up, and improving it. I’ve gone through the pain and transition of Tradition to Digital Procurement regarding data.
But data really is the clean fuel you need when the data is good.
As you upgrade and explore Procurement Tech, you’ll realise that data capture has become more accessible and streamlined.
You’ll realise that there are providers in the market who solely collate, store, contort, and provide insights around various data points. That’s how powerful data is.
And you can roll this all up and get this data running through your Procurement Tech Stack.