The consensus these days is that data is power.
While the statement resonates with people, it does not provide any tangible use cases or action items on how to use your data to become more powerful.
An example of how Stratos has empowered companies to use their data is through a procurement solution we call Supplier 360 Analytics.
So, what is Supplier 360 Analytics?
Let’s break this down:
- Supplier: A person or organization that provides something needed such as a product or service.
- 360: Referring to 360 degrees in a circle and in business means an all-around view
- Data and Analytics: The management of data for all uses (operational and analytical) and the analysis of data to drive business processes and improvement, according to Gartner
Putting these all together, Supplier 360 Analytics is a solution that provides Procurement and Strategic Sourcing professionals a full view of each of their suppliers that empowers them to draw conclusions from the data that is provided to them.
But who cares? Why should any organization spend time, money, resources, and effort to compile a bunch of supplier data into a single dashboard?
How does it help with my problems?
From a Strategic Sourcing and Procurement perspective, let’s look at the challenges you face when there isn’t easy access to holistic supplier information versus when having access to Supplier 360 Analytics.
Inability to easily save the company money.
One of Procurement and Strategic Sourcing’s key responsibilities is to save your company money by negotiating with suppliers.
But when you have limited time and are rushed to get things done with no easy access to all the information you need to control the discussion, you end up being put in a position of weakness when meeting with suppliers.
Alternatively, to help offset some of the effort it takes to cobble information together, you may hire an external or third-party team of people to help do it for you.
So now you’re paying for extra help to manually compile the information you need and you have to manage these people while also dealing with your day-to-day job.
As good as this external team is, they still make mistakes because it’s a very manually intensive process and because they don’t have the business acumen that you have. They can’t quickly identify obvious issues that you would easily catch.
You eventually stop relying on this team yet continue to pay them, and now you find yourself back in the same situation as before except you are now spending even more money.
If you had access to the information in an automated solution that was consistent and validated instead of relying on the external team to manually compile the data, you would actually be able to have fruitful conversations with suppliers and focus on saving your company money.
Not having the upper hand in supplier negotiations.
Now take this scenario: Your head of FP&A is coming to you with a consulting statement of work (SOW) to expand the usage of their financial planning software, and they need to get it signed ASAP to make sure they have the finished product before the budget season.
The consulting firm has been a supplier for many years and FP&A has always spoken highly of them. You trust your head of FP&A and quickly expedite the agreement.
Fast-forward to after the project is over. You’re in a meeting with someone on the FP&A team and casually ask how the project went. You learn that the project had mixed results and the general consensus is that there wasn’t anything special about the consulting team. You start to doubt if you should have expedited the agreement in the first place…
Now let’s look at the situation if you had holistic information and the history of that supplier at your organization.
You look up the consulting firm on your Supplier 360 Analytics dashboard and see that:
- You’ve spent $2 million with them over the last 2 years
- 40% of their projects have gone 30% or more over budget and required change orders
- Project survey feedback from the extended user audience was mixed
- Their Financial Risk Score from Dun & Bradstreet is concerning
- They recently were acquired by a private equity firm
With this information in hand, you can now feel empowered to go into a conversation with this supplier and be able to negotiate better terms, a discount, or a fixed price agreement, or even challenge your head of FP&A to understand why they continue using that vendor if the results are mixed, opening up the opportunity to explore additional vendors and position yourself to be selective during the process.
The head of FP&A might push back, but armed with the information, you start to ask about why they went with them in the first place. You might find out that they had a previous relationship with the head of the consulting firm, or they previously worked together.
Information (data) is power. Your responsibility is to be a helpful business partner to your department heads, but that does not mean you need to be bullied by them into making bad decisions.
By having access to data, you can focus on cost reduction strategies and better manage your supplier relationships by being able to ask the right questions and better position yourself for supplier negotiations.
Difficulty finding qualified suppliers.
Finding viable vendors in very niche spaces can be challenging especially when the department head is looking for a list of feasible vendors ASAP and you have a backlog of 100 other requests.
You might Google around for suppliers, and the ones that come up will be those spending money on Google ads, who are known in the industry, or have positioned their website to be highly ranked. None of this means that they will be the right fit for you.
You could also search technology partner websites, talk to people within your network, or talk to people within your organization who have worked with other vendors in the past.
All perfectly viable options but they can be time-consuming and do not necessarily provide you with the quantitative information you need to thoroughly evaluate each potential supplier.
So you’re left with providing results that seem viable and are generated through the path of least resistance – which may or may not lead to the best possible supplier selection.
But what if there was a dashboard where you could access information such as supplier financial risk, satisfaction scores, and diversity metrics. Or better yet, what if you could pull a list of suppliers within the desired category with a rich attribution providing you with enough information to compare and contrast suppliers?
With Supplier 360 Analytics, instead of searching far and wide online and compiling information from different search results, you can now easily access the collective information in one location.
Now you can easily search and review qualified suppliers and be proactive in providing possible options to your business partners – all while also handling the other hundreds of requests coming to you.
Managing continuity during high turnover.
At some point in their history, large organizations will have lots of turnover.
Large organizations also can have automated agreements and renewals with suppliers. All someone has to do is click an “I approve” button in an email and things keep on moving.
Let’s say a department head leaves your organization and all renewal messages have been going to their inbox. Once their email shuts off, important renewal information may never make it to anyone else in the organization because it continues to automatically go to the person’s inbox who left.
This may not be a big problem, unless the renewal information is for a mission critical piece of software, supplies, or data offering for running your business.
What ends up happening is that everyone from procurement, IT, and the impacted departments are scrambling to figure out who to contact at the supplier to ensure service is not interrupted – putting everyone on high alert with unnecessary stress and wasted time.
If you knew when that renewal was coming up, who owned that renewal, and if that person was still at your organization, you’d be able to avoid a lot of headaches and wasted time.
By having information on a Supplier 360 Analytics dashboard, you’d be able to quickly identify expiring contracts or master service agreements. This would then allow you to get in touch with the key stakeholders in the organization to make sure that everything gets handled as expected and in a timely manner.
Furthermore, the business heads will appreciate you being proactive and will ease the burden of their job, because let’s face it, they are not thinking about contract renewals until the absolute last possible moment.
Department heads will start looking at you as a trusted business partner and will respect you for the service that you offer them – making their jobs easier and less stressful.
Not getting the respect that you deserve.
Sourcing and Procurement teams are rarely given the respect that they deserve. They are the ones focused on trying to save the company money, yet everyone always sees them as the bad guys.
It probably sometimes feels like you can never do enough for your business colleagues. You spend countless hours compiling information for them, and their response is rarely filled with gratitude, but more begrudgingly is a “thank you, but why did this take so long?”.
And more realistically, you probably are hearing things like:
- Why is this supplier assessment taking so long?
- How come it seems like we can’t get this deal signed?
- My team is wasting hours because you can’t seem to get things aligned with your process
So now you’re working nights and weekends to try to please everyone who’s request is deemed the most urgent, and they probably gave you very little notice about the situation in the first place.
On top of that, you then have your boss breathing down your neck because the department head went to their boss to then go to your boss to talk to you about why things are taking so long. Oh the joys of office politics.
You can’t catch a break.
It’s not like you are doing these things intentionally, but nobody sees it that way, because let’s face it, everyone is always thinking about “what have you done for me lately?”
You think that you probably could find a better job at another organization, but you then realize that their sourcing and procurement teams are probably treated the same way, so you go back to the endless stress cycle of an understaffed and overworked team.
And you keep saying to your boss, “this would be a lot more manageable if I just had access to the information that the business partners need in a much timelier way.”
That’s the thing. The data exists. You know where to get the information they need. It just takes a lot of time to go get it, compile it, align it, and make sure it is accurate, before sending it to the business.
Think about having access to a portal that had all the information you need precompiled and validated, and it is updated in near real-time as soon as any data in the source systems change.
New contracts are added, invoices are tagged to purchase orders, risk scores are updated – everything loaded directly into your Supplier 360 Analytics portal.
Now all you have to do is set up notifications for what’s important to you and save views that you use repeatedly to answer questions from department heads. And that’s it. Your job has been simplified because the data lives in one place. It sounds magical, but it is very much a reality.
And even better, you could give your business leads access to this portal so that they can get the information they need directly without having to go through you!
Now you can truly focus on being more strategic and proactive to ultimately earn the respect that you deserve from your business leads.
Technology built around the right process can make a world of a difference in how much people value their jobs.
Also, your sourcing and procurement teammates will stop leaving for better opportunities.
Data is only power when you know what to do with it
Data is power when you have easy access to that data and know how to wield it for your benefit. It is time to shift the negotiating power from your suppliers back to you and reposition the conversation so you can have more productive discussions.
If you’re ready to save your organization money, earn the respect of your business partners, and go back to enjoying your job, reach out to Stratos today for a discussion on how Supplier 360 Analytics can get your data working for you again.