In the past few years, Procurement has gained traction and has had increased strategic importance in the companies. Procurement professionals are now expected to do more within the given time frame. And in order to do so, they need the help of market intelligence.
They must have access to supply market intelligence and know-how to use it effectively so that they can make the right decision without falling behind. The importance of procurement market intelligence cannot be overstated. Read on to learn more about what it is and how it can benefit your organization:
What is Procurement based market intelligence?
There are three pillars of market intelligence:
1. Market research
It mainly involves data – collecting, accessing, storing, and analyzing it as well as the many applications and methods used for doing so.
2. Competitive intelligence
It consists of finding information like disruptors, competitive dynamics, and other value levers for strategic purposes.
3. Supply Markets Analytics
This key pillar covers the process of collecting relevant information regarding the supply market of the company and analyzing it.
All the above-mentioned pillars support the vision of enabling confident and accurate decision-making for the procurement process. It is because of this that market intelligence from the perspective of procurement is called Supply Market Intelligence (SMI).
The information which forms the basis of SMI can be obtained from a simple Google search, following social media feeds, reading trade publications, or following any other approach.
One of the most advanced approaches is using a third-party source of market intelligence for triangulating multiple data streams and inputs resulting in the creation of a holistic strategy.
How can procurement-based market intelligence benefit your company?
1. Effective operations
Even if the organization has an efficient supply chain, inventory, and procurement management strategy, it doesn’t mean that they won’t face any issues. Their business can get caught off-guard because of a sudden change in the operations, business, or management of the suppliers.
And this has been proven by research. But, with the procurement market intelligence solutions, they will receive a signal alerting them of any changes in the business of the supplier in real-time.
This information can also be used for planning a backup supplier. If the company has this information, it will be able to react quickly to any changes and increase dependability across operations and preserve consistency in the supply chain.
2. Competitive advantage
By reacting faster and being quicker and more agile than their competitors, companies will be able to get an edge in the market. For example, if they work with a key element that is difficult to acquire, they can lock up supply before their competitors using the procurement-based market intelligence.
3. Superior strategies
Companies often carefully observe how potential events can have an impact on their operations and improve their supply chain plans. For example, if there is a sudden increase in demand in a particular region, companies need to find out if they can exploit the opportunity with the right suppliers and strategy.
Another example is if a supplier faces a disastrous event, the company has to figure out how it will impact their business. With procurement-based market intelligence solutions, they can get exclusive insights and advance warnings for events that might happen. It can also provide information to evaluate alternative approaches and suppliers.
For the time being, companies used manual methods to collect and analyze procurement data. But, many of such companies struggled with this until the automated processes came into play. With accurate procurement market intelligence solutions, companies can now make better decisions, reduce risk, save money, and avail of other benefits.
Passionate Writer, Blogger and Amazon Affiliate Expert since 2014.