Understanding Procurement Analytics and Its Types
Procurement analytics is the procedure of gathering and analyzing the data pertaining to procurement to construct meaningful insights and support practical business decision-making.
Examples range from conventional procurement spend analysis reports to advanced intelligent analytics to anticipate and budget future decisions.
Procurement analysis typically involves accumulating data from different sources such as ERP software, organizing data to standard or use-case-specific systems, and depicting data in a visualization dashboard or within business intelligence tools.
Why Procurement Analytics is Required?
For many organizations, data analytics is not just data visualization. Procurement analytics collects, cleanses, and enriches a huge amount of data from different sources to create value for the organization.
It is vital to understand that only the accurate, actionable, and timely insights from procurement analytics can bring maximum value to the organization. Businesses can leverage data analytics to define, forecast, or enhance their performance.
When used effectively, procurement analytics can facilitate better decision-making, where vendor relationships and buying decisions can be handled more effectively.
Different Types of Procurement Analytics:
Procurement analytics has emerged as a guide to making better decisions by understanding past procurement performance.
There are 4 common types of Procurement Analytics:
- Descriptive Analytics – You gather past procurement data and analyze it on a dashboard
- Diagnostic Analytics – You collect past procurement data and understand what went wrong and went right.
- Predictive Analytics – You collect past procurement data, and analyze the trends and patterns to predict the future performance of your procurement function
- Prescriptive Analytics – You gather the data, and make predictive models which guide your organization in better decision making.
VENDX is a state-of-the-art procurement to pay solution, equipped with an out-of-the-box procurement intelligence engine that can help your organization make a wise purchase decision.