Intelligence in Procurement?

[Ari Korpinen]

Procurement professionals are expected to select suppliers that provide best value-for-money for the company they work for. Implementing some solid business intelligence methods in the supplier selection process is one way of securing best value-for-money and reducing the risk of supplier failure.

Does any of you members on this Forum have experience from using BI in Procurement?

I'm not sure whether there are full-time Procurement professionals on this forum besides me, but maybe there are some full-time BI consultants who have done consultancy assignments for a Procurement operation client. Or maybe you have some thoughts about this topic nevertheless. If so, I would be interested to share some thoughts on using business intelligence in Procurement. What methods have you used? In what stages of the Procurement process have you used them? Do you have experience of sharing with other functions of the company any information obtained from suppliers during the sourcing process?

My view is that BI has a lot to offer for the Procurement professional prior to supplier selection; e.g. when it comes to validating claims made in tenders by prospective suppliers, or in preparing for negotiations (e.g.developing question-sets for prospective suppliers based on signals received during the pre-negotiation due diligence). Business analysis methods can also be used to obtain an understanding of the drivers of the suppliers business, which again can be used in analysing tenders. And furthermore, BI can be used also after the contract has been awarded to monitor the supplier's performance. BI methods can here provide early warning signals on potential upcoming difficulties with a selected supplier.

It would be interesting to hear your thoughts on this topic.

All the best,
Ari