Build resilience in sourcing with Data Analytics

How to implement Data Analytics effectively in procurement management? This can be difficult for many organizations, either because of the high complexity and organization required, poor transparency of spend or over-reliance on instinct. Generally, this results in siloed data collection (i.e. disconnected from any strategy and unable to generate value) and manual processes, which involve unnecessary expenditure of time and constant exhaustion for buyers who must bid for dozens of products and services every week.

COVID-19 exacerbated these challenges, but at the same time opened the door to a harsh reality that companies had been ignoring for a long time; the need for accurate data and information to drive business decisions in the face of an increasingly volatile and uncertain economic scenario.

A survey conducted by McKinsey in 2020 found that only 41% of companies consider that their ability to react to a crisis has improved compared to 2008, the year in which the global financial crisis broke out and whose negative effects are still being felt today. In an increasingly volatile business environment, this level of progress is poor, revealing that the areas of Procurement and Supply remain highly vulnerable.

However, companies can take measures to help them respond to internal and external obstacles. In this way, they can be more resilient in the face of the current crisis. Data Analytics, for example, is a particularly useful tool. In fact, a NewVantagePartners report found that companies that have a data-driven organizational culture are 58 times more likely to exceed their ARR goals, and with the help of this technology, these companies are reducing their costs by an average of 10%.

But companies face major challenges when they try to implement it throughout their organization, mainly because data from the Purchasing areas is often fragmented, lacking traceability. For example, the purchase order for a given product might be stored in an ERP system, while the invoice is stored in Finance and the contract might be stored in a CRM system. When data is scattered in silos like these, companies cannot create a single source of information to generate high-impact business strategies.

S2P technology solution now available in Latin America

A concrete example of this situation is the time periods in terms of payment. Companies often impose a standard time period for the payments they make to their suppliers and another, generally much shorter, for the payments they receive from their customers. This difference has financial implications and certainly affects long-term relationships.

By taking a holistic view, companies can better understand both the buyer and the supplier, and potentially negotiate payment terms that are more beneficial in the long term for the company.

La buena noticia es que el Data Analytics aplicado en la gestión de Abastecimiento ya está disponible en el mercado latinoamericano con herramientas como Wherex, un software que automatiza y optimiza las compras empresariales y los pagos, lo cual se conoce como un software S2P (Source-To-Pay). Ya son cientos de empresas en Chile, México, Perú y Colombia las que están obteniendo datos de valor para su cadena de suministro, generando trazabilidad en sus procesos de compras y, en el caso de las empresas chilenas, fortaleciendo la relación con sus proveedores a través de herramientas de financiamiento como Confirming ProntoPago y Confirming Prórroga. 

Al utilizar de mejor manera los datos propios de una empresa, el análisis puede ayudar a las organizaciones a gastar de manera más inteligente y eficiente, mejorando su posición en cuanto a liquidez y costos. Estas tecnologías también aumentan la transparencia y la velocidad de las operaciones, brindando a los tomadores de decisiones información crucial para determinar cuándo, dónde y cómo actuar. De este modo, en Wherex estamos ayudando a las organizaciones a ser más resilientes frente al actual contexto de crisis.