Cloud Aerospace

What is Procurement Intelligence and How Can It Benefit Your Business?

Sometimes intelligence is just about seeing an impossible situation differently than other people. A friend of mine was wearing a comical t-shirt and it prompted a conversation on the following scenario – basically two people go on a hike and encounter a hungry grizzly bear. One person starts to run when the other calls out some statistic about bears being able to run 50km/h. The runner turns and replies:

“I don’t have to outrun the bear! I just have to outrun you!”

be nice to fat people

I’m fairly certain that there are better ways to deal with a bear encounter, but I’m not Bear Grylls – adventurer and family man! – and my experience comes from my limited weekend hiking. There are probably ethics and morality issues with the previous scenario but the point is one person was thinking strategically when faced with an external problem.

Procurement intelligence is critical for an organization’s long-term strategic planning. If your organization has access to both real-time and historical data on spending, costs and budgets it will be better informed when making important decisions to drive future action. Procurement software solutions exist that make operational processes more efficient and simultaneously open up company data. Beyond collecting and analyzing data, an organization should be prepared to think strategically. Unfortunately, many organizations are not set up with a system that promotes strategic thinking and are unaware of the values of procurement intelligence.

According to Jeanne M. Liedtka, an American strategist and professor at the University of Virginia, there are “five discrete, but interrelated, elements” that are essential to strategic thinking within organizations.

5 elements of Procurement Intelligence

#1 Intent Focus

A clear set of goals will allow your organization to develop strategies to reach greater potential. By making the intention to improve procurement intelligence known your organization will naturally start to make adjustments.

#2 Intelligent Opportunism

Strategic thinking has just as much to do with access to data as it does to being open to change or new experiences. Companies that encourage innovation, even at the cost of failure, will be exposed to alternative strategies and will have access to more options as business environments constantly evolve. Don’t quote me but NASA claps every time they catch a major mistake.

#3 Systems perspective

This is basically having an understanding of how all the small parts that make up your organization are related and how they affect your organizational ecosystem. Having accessible procurement software can help bring data-driven insights into a companies financial health.

#4 Thinking in Time

With progress, it is important to connect the current reality of your situation to your planned destination. You still need to go where you are planning on going. Even if your current situation lacks resources or the appropriate skill-set, a simple switch in mindset might give your organization a boost. Don’t spend too much time thinking about what you don’t have or think you need and instead make the most of the resources and assets presently available. A focus on procurement intelligence means project managers already have an intuitive understanding of the supply chain and what can realistically be accomplished. This will allow employees, clients, and owners more transparency into the operations so that there is better communication between parties.

#5 Hypothesis Driven

Strategic thinking needs to be driven by both creativity and data. Thinking analytically after creative solutions are posed will help organizations explore new ideas and determine their impact. This aspect of procurement intelligence will allow your organization to continually innovate and find ways to make things cheaper, more efficient or increase profitability.

Procurement intelligence is really just about finding the right data, and then being able to come up with strategies to move the data in a positive direction. An oft-neglected, but extremely vital, part of intelligence is just being willing to try things in a different way. Having a purchasing or procurement process is a crucial function of your organization. While procurement software alone will not drive procurement intelligence, it will give you access to the right kind of data to make more informed decisions.

What do you think?

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