Procurement teams generate massive amounts of data but 40% of companies feel they can achieve large savings in their procurement contracts by managing contracts better.
Data analytics can effectively derive insights from contractual data to realize sourced and negotiated savings, enforce supplier compliance, and manage internal obligations. But to do this you need to link internal data sources such as contract and spend data, to external data sources such as supplier databases.
Contract Analytics should lead to enhanced “Order to Contract” linkage and drive demand to preferred suppliers. Thereby decreasing maverick spending and increasing contract compliance.
With a combination of data mining, predictive analysis, and risk analysis, enterprises can forecast spending based on anticipated changes, better analyze and understand spend patterns, and identify risk and/or define measures to deal with risk scenarios.
Overall, contract data analytics in procurement promises improved contractual compliance, improved data integrity between contract data and downstream systems, and greater visibility and control.