The use of big data analytics in various business environments continues to have a positive impact on the decision-making process, as a result of the insight it provides. Individuals who utilize e-procurement software are part of those who are reaping the benefits of big data.
An analysis of the importance of big data in e-procurement, the real value it affords businesses, and how it can reduce indirect spending will reveal how this concept is impacting the purchasing environment.
The Importance of Big Data in e-Procurement
Mining the information provided by big data and putting it into meaningful use makes it a valuable asset for procurement officers. Here are some of the categories that highlight the importance of big data in e-procurement.
Forecasting and Prediction
Seamless procurement operations greatly rely on the forecast and prediction of future demand. Having the right information is imperative to more accurately predict business outcomes. Businesses that have a tool that captures this information and allows them to retrieve it are in a better position to be successful. By offering spend analytics and updates on market statistics in real-time, big data promotes the adoption of effective procurement strategies. You can also gain insight regarding issues affecting your suppliers through big data, so you can take action before things get out of hand.
Management of Indirect Spend Expenses
When companies need to save money, the procurement department is often at the center of the conversation and under pressure to produce results quickly. Reducing your indirect spend is one of the fastest ways to drive savings without having a significant negative effect on your business. In the indirect spend area, there are usually a high number of small transactions that make up a meaningful amount of spend. Having the detailed spend data and the analytics derived from it readily available puts procurement teams in position to act quickly to drive a positive outcome of predictable savings.
Supplier Relationship Management
Your suppliers can either taint or enhance the image of your enterprise, and that is why tracking their performance is critical. The data you collect from the right e-commerce platform can be really helpful here. For example, you could track the amount of time elapsed from when an order is placed and when it is received by the vendor. This can be used to benchmark your vendors, set measurable service level metrics, and rank vendors in terms of service level. Similarly, this can be done with the pricing of exact match and similar items across multiple vendors.
The Value of Big Data
Big data derived from an e-commerce system can support supplier analytics, compliance analytics, spend analytics, performance analytics, and category analytics. Utilizing what you learn from analyzing these data will add value in the following ways:
- Makes finding savings opportunities easy
- Eliminates reactive decision making
- Informs how your business interacts with suppliers
- Improves procurement productivity and engagement
- Reduces risk and cost in the supply chain as a result of increased visibility
e-procurement Software Solutions
A robust e-commerce platform with a customized online shopping marketplace, such as Value Innovation Technologies’ (VIT) eLink™ Gateway can provide the big data you need to run your business. eLink™ Gateway is designed specifically to manage spend on repetitive purchases by guiding employees to the items that are the most advantageous for the organization. eLink™ Gateway does this across multiple contract and non-contract vendors at the same time, driving savings and efficiency, while simultaneously supporting other procurement initiatives (e.g. environmental initiatives, supplier diversity, etc.).
To achieve the benefits discussed in this blog, a company needs an e-commerce system that will control the shopping experience and capture data on a detailed level. Utilizing eLink™ Gateway, your business (the purchaser) requests catalogs from your suppliers. They are loaded into your online marketplace and your employees are able to shop from all of them from one centralized location, instead of having to visit each vendor’s website. eLink™ Gateway provides additional controls that our competitors are unable to provide at the moment.
- Multi-vendor catalogs – eLink™ Gateway can combine vendor catalogs to simplify the shopping process.
- Automatic Substitution and Automatic Comparison – eLink™ Gateway automatically guides your employees to the lowest cost items. When they search, the system will drive them to the company’s best option.
- Detailed Reporting – eLink™ Gateway captures over 125 points of data on every line item of every order, giving you the big data you need to derive smart and actionable conclusions about your spend.
A software platform that collects important data while controlling the shopping experience is essential for any business that desires to turn their procurement process into a business advantage.
To learn more about our industry-leading software and how it can help your business save money on indirect spend or to schedule a demo, give us a call at 704-296-2987, email us at email@example.com, or visit valueinnovationtech.com.