I’ve just
read two interesting blogpost of Joe Payne about predictive analytics in
procurement.
Although I
definitely see the value of 'predictive
analytics', I think the definition itself for the content of his blogposts is
to narrow. It’s just scenario 3 in which there is something about 'predictive
analytics': ‘provides a forecast out for
the year based on’.
I think 'predictive
analytics' is (a very important) part of a greater whole. At the same time I
must admit I haven’t got the right label for that ‘whole’, but it could be something
like: ‘Real time insights and Predictive
analytics in Procurement’, ‘Procurement
Excellence 2.0’, ‘Managing the now
and the future of spend’, ‘Insights
based decision making for now and the future’, and then probably a somewhat
catchier name…
But as you
see, the key elements are mainly now,
future, decision making, realtime insights and predictive. What I want to make clear with those non-catchy names
is that a new version of procurement is around in which Operational decision
making in procurement is based on realtime information and strategic decision
making is based on predictive analytics.
I named it
a ‘new version’, but ‘upgrade’ is perhaps a better word, because most traditional
procurement parts are still necessary, or better: they are the building blocks
for the upgrade (sourcing strategy, purchase to pay, spend analysis, category tree,
master data management).
The change
for the procurement department will mainly be in their way of working: how to
interpret the information and how to use it to make better decisions. Cooperation
with IT experts, content expert (to define which information is useful) and
analytic experts to assure the right input/output, software selection and
maintenance, master data management is a prerequisite in order to succeed.
It is
something new (at least for procurement) and it will cost some time and money
to implement it, but it will become the new frontier in procurement. And as Joe Payne mentions in his blogpost: ’ The investment will be substantial, but so
is the payback.’
Real time decision making in procurement and category management is certainly very exciting but I wonder if organisations will remain lean enough to be able to take quick decisions. With procurement always needing stakeholder buy in this will be very interesting to watch develop, Kevin. The future will indeed be exciting to be involved in. www.futurepurchasing.com
BeantwoordenVerwijderenReal time decision making in procurement and category management is certainly very exciting but I wonder if organisations will remain lean enough to be able to take quick decisions. With procurement always needing stakeholder buy in this will be very interesting to watch develop, Kevin. The future will indeed be exciting to be involved in. http://www.futurepurchasing.com
VerwijderenHey Kevin this the only reason Flipkart is suing the predictive analysis.
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