Opening spend analytics data to decision makers reducing costs? Here’s Why!

Using Analytics for Better Decision-Making

Spend analytics information has traditionally been closely guarded by procurement. But this approach is arguably a lost opportunity for both procurement and the wider business.

Spending decisions are regularly made by other functions, so for a business to derive the best value and outcome from those decisions, spend analytics information must be used — not just viewed — by all stakeholders.

Before that data can be used effectively, there has to be cohesion and agreement about several key issues. The first issue: There must be a single version of the truth, with everyone working from the same data and analytics. Without a unified approach, different functions will make different decisions based on their own information, and the objective of improving value in spend decisions will be lost.

The second key point: There must be agreement on what is “good enough” for the purposes of the organization. That will vary from company to company. While some might want close to 100 percent accuracy of their spend analytics data, it’s important to understand that achieving close to perfect data will be costly, and it’s unlikely the company will get adequate return on investment. A “good enough” estimate of 80 percent data accuracy will give you enough insight to enable your people to make good spending decisions. It should also be noted that to achieve a single version of the truth and the required level of data accuracy, an organization should work with a specialist that has the data skills to create reliable spend analytics information.

Analytics

Simple access

Other key considerations: ensuring that the data is easy for everyone to access and easy to interpret so the right spend decisions can be made. The level of access and the depth of information must also be adjusted for the individual. For example, the chief executive will have a different requirement compared to a category manager or a buyer in a department. Equally, the information must be targeted to the skill level of the individual. Those with high-level analytical skills should have access to more in-depth spend analytics data, while others might simply want an-easy-to-understand dashboard or application.

The tools users can access are also important. For example, a voice recognition tool that allows users to ask the application a simple question such as, “How much do I spend with suppliers in manufacturing?” might be most useful for some individuals. If the tool is designed properly, it can provide the user with a chart or report with the required information.

If everyone involved in spend decisions has the ability to freely and easily access spend analytics data, companies can start to drive cost savings and achieve greater efficiencies.

Lowering costs and increasing value can be crucial for life sciences organizations where indirect spend is widely distributed across different functions. Without access to information that’s accurate and trustworthy, they can’t make the right buying decisions and won’t adhere to corporate procurement standards or processes.

In fact, most procurement managers are all too accustomed to different departments spending with suppliers that are not part of a purchase order agreement. The procurement managers can save themselves — and their organizations — a lot of pain by making information easily accessible, reliable and user friendly.

Threats and Opportunities in Travel and Transportation from Digital Transformation

Digital Transformation

In travel and transportation most companies today don’t look at customer journeys as a collaborative exercise. They consider their job done when passengers are delivered safely to their appointed destination for their segment. A railway, for example, may only care that it has moved passengers safely from station A to station B. It ignores the fact station B is an airport, and the passengers it dropped off are actually headed to dozens of different destinations.

To deliver real value to customers, companies need to surmount the cultural and technical obstacles to data sharing to create a true transportation ecosystem. The idea of bridging systems, breaking down silos and sharing data with others raises the fear of companies losing their individual value propositions. The reality, however, is that being part of a connected transportation platform will generate more value than it destroys and will create entirely new opportunities for companies that never before existed. What’s needed is a digital enablement strategy.

Digital Transformation in Travel, Transportation

Looking across a chain of events

Digital transformation is built around an information architecture that enables companies to look across a chain of travel events for an individual customer or package to identify problems, predict the impact, and automatically develop and execute solutions that keep passengers and freight moving.

New services can be built around a platform like this that help companies differentiate their offerings or add value in new ways, through mobile tracking solutions, or by using analytics to improve warehousing fulfillment and distribution. For examples, sensors in a refrigerated freight car that can sense an elevation in temperature could trigger a maintenance request to repair a problem or move cargo to another car before it spoils.

Passenger transportation companies can tap into these same tools to find ways to extend their brands and expand into the multiple modes of transportation available to passengers. Digital enablement helps companies understand the full passenger journey and allows for a seamless approach, even if the company is not part of the entire chain of events. A hotel notified that incoming guests are experiencing delays could offer weary travelers an added comfort or convenience as a way to differentiate their customer service.

Capabilities like this don’t require wholesale integration. They can be developed and delivered through loosely connected systems that share selected data, understand the most important attributes of a customer’s journey, and have the awareness to detect issues, the context to recognize the impact and the intelligence to take action.

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