- Tags : Market Intelligence
To do your job well, you need market, supplier and category information that is accurate, unbiased and up-to-date. And sure, your organization could conduct its own market research and compile its own intelligence – but who’s got the time or resources to do that?! Instead, procurement departments these days are harnessing market intelligence (MI) as one of the most efficient tools to develop and support strategic sourcing decisions. Gaining access to third-party category research will help sourcing staff make informed decisions and achieve goals, such as:
Procurement departments have many goals these days, but cost savings and/or cost avoidance remain top of the list for most organizations. Market and category intelligence can help in several ways, including:
- Providing benchmark pricing so you can be sure that what you’re paying or being quoted is in line with average market prices
- Uncovering substitute or alternative products or services that you may be able to source at lower costs
- Identifying related goods so you can bundle goods or services from fewer suppliers, leveraging larger spend to negotiate better pricing
- Shedding light on the total cost of ownership (TCO) of a product, so you can budget more accurately
- Arming you with information and questions to ask during negotiations to ensure you get the best price and contract terms possible
Procurement professionals are being asked to do more with less and often feel pressed for time, especially when it comes to the amount of time spent on research. Instead of using a search engine and sifting through thousands of search results (which may be biased, inaccurate or out-of-date), MI can drastically reduce your research time by providing condensed and concise data and information. This intelligence can help you in every stage of the purchasing process, from assessing an opportunity through negotiations and on to contract and vendor management – overall increasing your speed to market.
Risk is everywhere in the business world, but it is possible to avoid or mitigate risk in procurement with the strategic use of category intelligence. Preparation and knowing which questions to ask up-front can help you evade or mitigate risks, such as: financially unstable vendors; upstream supply chain interruptions; disruptions from natural disasters or political unease; fluctuations in commodity prices; or regulatory change implications.
Procurement professionals have struggled for decades to gain the respect of internal stakeholders and management. Market intelligence can be a critical tool in helping you to demonstrate your value and expertise across a wide array of categories, products and services. Arming yourself with unbiased, accurate data allows you to speak knowledgeably to key stakeholders and management when presenting your purchasing strategy. You’ll be able to confidently answer questions, defend your approach, and walk away with the necessary buy-in to move forward. This will enable you to gain the confidence of key stakeholders so that they more often involve you early in their planning.
Set Procurement Strategy
If you buy multiple products and services across many departments or service lines, you may be able to group those purchases into categories to get better pricing and contract terms. Could you buy goods in bulk and use them for many departments? Do you purchase products and services from multiple vendors, when you could instead consolidate them to one or two suppliers? Comprehensive category research can reveal ways to streamline your process and save you time and money. You also reduce risk by developing strong relationships with key vendors and having a more in-depth understanding of your upstream supply chain.
If your company does not have a well-defined procurement process, you probably feel you’re brought into the buying process too late to provide maximum value. Using category research to demonstrate your department’s value can help you lead the charge to having a seat at the table with other departments. The bulk of savings opportunities are found in the initial phases of the buying process, so being proactive and strategic can result in real value for your organization.
No matter your goals, market intelligence can help you achieve them
If you’re interested in providing a market intelligence solution for your department, there are many companies out there that provide similar but unique offerings. Custom research services and research consultants are common options, but they can require high upfront or monthly costs. Instead, ProcurementIQ's offering is an off-the-shelf procurement report library covering more than 1,000 indirect products and services. You’ll be able to log in from any web browser to access in-depth, accurate and unbiased research, right at your fingertips. Our easy-to-read reports closely follow the major steps in the procurement process to help you achieve your goals along the way.
Ultimately, it’s important for you to explore the various offerings and determine what solution works best for your department. But, we’re confident that ProcurementIQ will not only fit your budget, but it will provide true value and will become your go-to resource for achieving your procurement goals.