The most commonly heard challenge in Services Procurement is the inability to access the right data which, in turn, results in the inability to make the right decisions. The lack of insightful data leads to a cascade of problems.
The most commonly heard challenge in Services Procurement is the inability to access the right data which, in turn, results in the inability to make the right decisions. The lack of insightful data leads to a cascade of problems, chief of them are:
1. Being Unprepared to make the right decisions
2. Inability to present the right picture to the sponsors/management
3. Lack of preparedness to negotiate with the right suppliers and growing rogue spend
4. Loss of valuable time to go to market
Services procurement has faced this crossroads for long time, and it seems like one of the most difficult problems to solve. Our experience, however, shows there is a way to solve this seemingly difficult problem. Here we examine some of the remedial measures we can take to tackle this issue:
Foster a data-to-insights culture
In organizations, where there is a long-standing culture of data-driven insights, they can provide data-based inputs to solve problems. They lead with reports and have data on hand constantly. In these environments, they understand correlations between input data and outcomes and the potential art of possibilities. There are visible investments made into people, processes and technology to readily provide these data-centric outputs in a quicker time-frame to support Services Procurement efforts.
If any of these are missing from your routine conversations, it could be an indication that you are falling short in this area.
Organizations that have a strong data-to-insights culture will have a go-to person or a team that has a strong hold on the data and therefore is able to advise the right data collection and provide timely insights. They will produce data when required with timely reports and forecasts often without being asked for it.
Services Procurement programs rely on the data can precisely provide answers based on real data to questions such as Provide detailed report of workers including location, time of entry, cost of data analytics resources, or how compliant are with how we use data in certain procedures? In other words, there is a lot of detail available that translates the data in different ways to extract unique insights. If you are unable to answer these simple questions or need a lot of time to do so, then it is a clear indicator that your organization needs to advance their data and analytics capabilities.
So, what does it mean to build a data-to-insights culture? How long and what does it take to build one?
Examples of good metrics that many want, but find it difficult to have are:
1. How many invoices and the amount from the previous quarter (or period) pending to be paid?
2. In case of a renewal before maturity or enhanced scope, what is the remaining budget/spend (before change in scope was applied)?
3. Knowing top 5 skills deployed in milestone based (SOW) contracts, and use it to make key decisions – today – and as well as make forecasts, create what-if scenarios
4. For SOW’s completed and recorded as closed within a given period, calculate cumulative invoice spend over originally budgeted SOW amount