Data & analytics in procurement are crucial for decision-making and optimizing supplier performance, risk, savings, and sustainability.
However, defining the level of maturity is not always straightforward as there are multiple aspects to consider.
Sievo, with two decades of domain expertise, and pioneering LUT University of Technology have developed the maturity assessment to help you evaluate your current state and identify areas of opportunity.
Data and analytical maturity in procurement refers to an organization's ability to effectively collect, analyze, and use data to drive informed decision-making in procurement processes.
This includes using data to identify opportunities for cost savings, risk mitigation, sustainability, and supplier performance improvement. Organizational attitudes towards data and transparency play their part too.
The level of data and analytical maturity can vary, ranging from basic data collection to advanced data analysis and strategic decision-making. Ultimately, the goal is to drive better business performance through informed decisions and more effective management of procurement activities and external resources.
The most value-adding procurement teams combine servant leadership with business analytics and performance development.
Procurement's role varies across organizations. In some, it exists only for compliance and savings, while in others, it's a value-adding partner to leadership.
While procurement analytics has been in use for decades, it continues to be an area of development as market challenges and commodities are dynamic in their nature.
The best-performing teams have a clear value proposition: unlocking the power of procurement data to uncover insights that drive business growth.
The ultimate goal is to access reliable, real-time procurement analytics, which can significantly enhance the procurement's value delivery and position the entire organization for success.
To combat risks like economic downturn and recession, the key action by procurement is accelerating the transformation through automation, advanced analytics, and modeling.
There is much pressure on digital transformation to solve the universal challenges in procurement. Simultaneously, 27% of procurement leaders consider the inability to transform their businesses as their primary risk scenario (Hackett Group, 2023).
Simply put, CPOs are investing in data & analytics, recognizing that the inability to adapt and adopt the right technologies could harm their business success and competitive edge.
This all can leave procurement leaders wondering :
• What is the current state of our maturity?
• How do we compare against our peers?
• What are our most critical areas of improvement?
• What is a realistic timeline for transformation?
• Should we « build or buy » our analytics?
Please rate the level of maturity of the following aspects in your organization from 1 to 5.
1 = disagree, no efforts have been made.
2 = somewhat disagree.
3 = neither agree nor disagree.
4 = somewhat agree.
5 = agree, fully implemented and adopted.
To improve procurement data analytics, organizations should focus on building analytical capabilities with advanced data analysis methods, problem identification, predictive pattern recognition, and external data integration. These efforts can enhance decision-making and support business objectives. Read the best practices report for tips in all areas of maturity.
To improve procurement data management, organizations should automate data gathering, cleansing, and classification to ensure data quality and timeliness. These practices can improve data quality, accessibility, and utilization for informed, data-driven decisions in procurement. Read the best practices report for tips in all areas of maturity.
To improve procurement systems and IT landscape maturity, organizations should ensure efficient data transfer across systems, consolidate IT purchasing decisions, and establish a procurement information hub for insights and strategy. These efforts can streamline procurement and inform decision-making for business objectives. Read the best practices report for tips in all areas of maturity.
To improve digital procurement strategy, organizations should implement a clear vision, prioritize digital investments, align IT planning with broader business objectives, leverage digital technologies, and adopt a data-driven approach. This can enhance procurement performance and drive digital transformation. Read the best practices report for tips in all areas of maturity.
To improve data maturity and readiness, organizations should foster an open-minded attitude toward data. The CPO should align procurement strategy with broader business objectives. Organizations should also build skills, capability, and expertise to effectively analyze and interpret data. Read the best practices report for tips in all areas of maturity.
To improve maturity in spend management and finance, organizations should prioritize gaining complete visibility over their spend, increase the share of addressable spend, consider all contributions to financial performance, work closely with finance to align on savings goals and reporting, and track the realization of savings. Read the best practices report for tips in all areas of maturity.
To improve sustainable procurement maturity, organizations must enhance their data analytics capabilities by adopting platforms for carbon footprint calculation and CSR assessment. They should set sustainability goals, measure Scope 3 emissions, and identify suppliers contributing the highest emissions. Read the best practices report for tips in all areas of maturity.
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The assessment tool and best practice recommendations have been developed in collaboration with a pioneering academia.
Lappeenranta-Lahti University of Technology (LUT) is a pioneering science university in Finland, bringing together the fields of science and business since 1969. LUT provides a unique Master's Programme in Supply Management focusing on strategic supply and supplier management.
Sievo is the leading procurement analytics company with almost two decades of procurement analytics experience across the most competitive industries. Sievo helps large enterprises with varying maturity levels to address procurement challenges with analytics.
Dr Sc. (Tech), Professor of Supply Chain Management at the LUT University, Finland.
Professor Hallikas is acting as an Associate Editor of the Journal of Purchasing and Supply Management. His research interests focus on purchasing and supply chain management as well as risk management in supply networks.
Post-doctoral researcher at the LUT University, Finland.
Karttunen’s main research activities relate to purchasing, supply management, digital transformation, and sustainability. Over the years, she has published several papers in peer-reviewed international journals on organizational skills and capabilities.
Learn how to increase maturity in all 7 areas. Get the report now.