To demonstrate Procurement’s value, you need to collect relevant data, organize it accordingly, process the information in a way that makes sense for your goals, and present the information in way that is easy to understand. Here we are talking about Procurement metrics and dashboarding, and as with anything in business these days - people look to software to solve their problems.
The challenge in finding a Procurement Dashboarding tool – as with any toolset adoption- is balancing utility with all of the bells and whistles that may or may not be useful to the company. Not just within Procurement do companies try to employ highly sophisticated tools with a lot of bells and whistles only to find that what looked ideal on paper ultimately didn’t yield the expected return. Usually this is due to the unnecessary complexity creating distractions and adoption hurdles. That’s not to say that these tools can’t deliver significant value when appropriately aligned with companies ready for them. However, you may find it surprising to know that many large companies with mature Procurement and Sourcing organizations have found that the right foundation to build their metric tracking and reporting is actually Excel. In many cases, they go this direction after trying much more sophisticated tools and having them fail.
With Source One's Data Science discipline, our Procurement dashboarding experts know how to identify the right platform that’s sophisticated enough to suit your current requirements, flexible enough to adapt and support continual improvement, and not unnecessarily complex or over-specified so as to inhibit use or dilute your Procurement message. We’ve seen, used, and developed tools with excellent adoption and perfect alignment with Procurement and organizational goals, mainly because they’re accessible, configurable, and low or no cost.
Most important to note: to successfully implement a program like this you need to have a comprehensive guide or document for governance purposes. Your Procurement organization should have a centralized reference point that addresses all there is to know about the your metrics reporting. It should answer what metrics are being tracked, the reasons why they are tracked as they relate to greater organizational goals, and how they’re defined. Doing so will ultimately support your implementation and adoption of your Procurement metrics.
Obviously this is a much bigger undertaking than a simple blog can communicate. But if we were to try and summarize what it takes to institute effective metrics and dashboarding, it would be these three steps:
- Select Procurement metrics that are relevant & aligned to your organization’s goals
- Formulate solid business rules for deriving and tracking these Procurement metrics
- Report on these Procurement metrics with the right balance of sophistication & utility
Simple? Maybe. Easy? Not exactly, but that doesn't mean it should be difficult.