How Buyers Can Use Advanced Analytics

Digitalization and new technologies have changed our private and professional lives and actions significantly over the last five years. Companies are not only noticing these trends in the changing patterns in consumer demand, but also through the entire supply chain.

Many companies are currently in a race for customers, on the one hand, and for raw materials on the other, and they are investing more and more money in digital transformation.

However, many digitalization projects fail because of a lack of specialis understanding and the right focus. There has long been a wide range of tools available that can make staff’s work more efficient and effective. In procurement, too, companies can and should make use of digital tools and methods such as advanced analytics, e-sourcing, KI & ML.

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Why Advanced Analytics?

Advanced analytics is one of the most effective ways to quickly reach a sense of achievement as part of the digitalization of procurement. This is because the methods behind the term use resources that have long been in the company. Many managers believe their records to be incomplete or inaccurate, but this is often an unjustified concern: existing data is valuable, but most of the time it’s difficult to extract and analyze using traditional tools.

The most significant impact of advanced analytics is that it enables important decisions to be made much more quickly, based on more solid facts. If you know exactly what you currently have in your warehouse, for example, you can reorder much more accurately, and analysis means you have a future-oriented view, for example, through simulations based on data sets.

Companies can assume that the quality of analysis will improve in the years to come. The amount of data that can be fed into tools is growing and this data doesn’t only come from the companies themselves: extra information from business partners, suppliers and public sources open up entirely new possibilities. It is important that the system architecture is designed from the start so that new data sources can be flexibly linked up, enabling you to optimize the benefits of the tools even more.

So what is advanced analytics?

Advanced analytics encompasses a wide range of assessments that can help bring about changes and improvements to business processes. While traditional business intelligence (BI) analytics tools examine historical data, advanced analytics tools focus on predicting future events and behaviors. They provide what-if analyses, making the effects of potential changes in company business strategies predictable. (Source: TechTarget)

Advanced Analytics in Procurement

Advanced analytics promises major efficiency gains, especially in procurement. There are many potential applications. So much is possible, from pure visualization using customized dashboards to the analysis of trends and simulation of future scenarios

First, however, comes the data extraction. It’s not about going deep into databases and looking for hidden data; instead, everyone involved should help to create transparency – from identifying relevant data sources and their storage location to the possibility of linking them.

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