Blog: How Procurement Teams Are Using Decision Intelligence to Survive and Thrive in Chaotic Times

By Ron Giles, LevaData Head of Professional Advisory Services

Over the last three years, we’ve seen unprecedented levels of economic change and the resulting impact on global supply chains. Remember the China tariffs? Those marked the beginning of a very unpredictable next several years. Then COVID-19 happened, and things shut down. We had huge demand spikes coupled with freight issues and shortages. Now, the Ukraine war is happening, and inflation spiked and is ongoing. Out of necessity, procurement has become much more strategic and important to any organization. 

I recently discussed this topic in an event with the Art of Procurement. Teams now realize they must change how they do things. They must figure out how to balance part cost, supply challenges, and ESG on an ongoing basis without burning out. They struggle to manage these competing priorities with tools such as spreadsheets and single sourcing. As a result, we’re seeing organizations looking for more sophisticated solutions that enhance procurement’s impact.

A lot of companies don’t think about their procurement teams as a place to invest. Seventy percent of procurement professionals’ time should be spent on strategy and only 30 percent on tactical work. However, many professionals confess to spending almost 70 percent of their time on tactics and only 30 percent on strategy. Forward-thinking companies see the value procurement brings, and they’re investing in platforms to help teams become more strategic. Again, that is a big reason to invest in a platform. 

So, how do platforms create value? From a cost perspective, even just providing visibility to internal data surfaces lots of cost-saving opportunities. One company used market data to create more informed negotiations with suppliers and ended up saving over a million dollars by targeting just nine parts. From a risk perspective, companies using aggregated data can react quickly to avert supply disruptions. And speed is important when you need to pivot before alternate sources and capacity get exhausted.

Another major benefit of a platform is the kind of data you can gather to create insights. Contextualized data is core to what LevaData does. Aggregating data from multiple sources, including learnings from multiple procurement professionals, can help inform insights such as the top alternate sourcing locations in a region.

Burnout is real in the procurement world. Three years into the global pandemic, and uncertainty continues. In addition to helping teams make better decisions faster, AI platforms can support career progressions and capture tribal knowledge. There’s lots of hype about AI taking jobs, but I don’t see that at all. AI sorts through all the noise so people can spend time building relationships and focusing on strategy. AI will make procurement jobs better and more fulfilling.

Embrace these changes, and help drive them. If you are in an organization stuck with the same old tools and techniques, make the case for platforms to not only make the job more fulfilling and progressive but also provide significant and tangible new value to the organization.

To learn more about how procurement teams can use decision intelligence to survive and thrive in chaotic times, watch the on-demand recording of the full event.