AOP Live Recap: Giving Procurement Data Analytics Meaning
On our recent live session with Art of Procurement, our client Yannick Caharel, Global CPO at Christian Dior Couture joined SpendHQ Chief Product Officer Pierre Laprée to discuss how value stories reframe Procurement data analytics to establish strong relationships with the rest of the business.
What we found was that despite the importance of value stories matter, they’re not hard to tell when you follow the right steps, even if data itself is never easy to deal with.
In this live session recap, we’ll explore how Procurement at Christian Dior Couture is leading with data stories and how SpendHQ is building solutions that establish trust and make the process easier.
What is a data story?
As Chief Product Officer at SpendHQ, Pierre Laprée, explained, a data story is simply the act of bringing facts to the conversation, because “In God we trust. All others bring data.” Why should anyone trust what Procurement or any other business function claims to have accomplished without them?
Of course, this is one of Procurement’s lasting challenges. There’s more data readily accessible now than ever before, yet synthesizing or picking through it to find the right metrics is like looking for a needle in a haystack made of needles.
Yet Procurement at large understands how important it is. In a pre-show poll conducted by Art of Procurement, 47% of respondents said selecting the right metrics was the most important factor in telling a successful data story. 32% believed that context was the leading factor.
With the audience relatively split, it’s clear that Procurement understands the importance of data stories. But as the rest of the webinar revealed, a quality data story can only result from an equal mix of metrics and meaning.
Start with the right facts
As Caharel explained, “If you don’t have the proper systems, the proper reporting, the proper metrics to tell your story… then you can be totally lost in a few days.”
If you, as a Procurement practitioner, can be lost without the right data, just imagine how lost your stakeholders are without it. Therefore, while quality data as an asset and concept is important (we spoke at length with Art of Procurement on this topic in a recent podcast episode), carefully picking the right data points is equally crucial.
Caharel explained that if he came to the brand’s world-wide marketing director about savings, the conversation wouldn’t be very productive. But if he led with data on event budgets and ROI, the marketing leader will be invested in the conversation. Similarly, a packaging stakeholder cares about having packaging on-time, in-full, in the right location, regardless of who the supplier is or how much the per-unit cost is.
There are other dimensions that determine what a data point is useful for too. As Kelly Barner mentioned, some data points speak to Procurement’s performance and impact instead of opportunities. The good news, Laprée pointed out, is that you can use performance data as a leading indicator that helps you predict future results based on what you do today.
“There are a bunch of these indicators that the procurement could be using. On really the performance management side: what is the state of your pipeline of project? What is the level of risk on this project? What is the capacity of your team versus what you have in the pipeline? So all of these are good leading indicators of the capacity of procurement to drive value down the road.”
The starting line for alignment: spend analytics
Of course, Procurement is defined, fairly or unfairly, by cost. Savings is the metric that will never go away when it comes to establishing Procurement’s value. So to Caharel, using spend analytics to find and execute on opportunities is the best way to earn the organization’s trust.
“In the luxury industry and in the world of indirect procurement, we have kind of a ratio. Whenever you invest into a buyer somewhere in the world, this buyer has to cover a minimum 10 to €15 million of budget and deliver 5 to 10% of savings… [spend analytics is] an entry point because you can tell the story you want. People will always see, I don’t know until when, but we always see procurement as a saving solution provider. So the baseline has to be this entry point. Once…the finance community decided to be able to invest into this organization, then you can roll out and talk about innovation, CRM, digitalization, bringing efficiency to the organization from accounting to manufacturing to logistics, and so on… But as of today, savings and budget coverage are still the entry point so far in my experience.
Making procurement data analytics mean something
Have you ever opened a spreadsheet with thousands of rows filled with numbers? What did it mean to you? Probably not much. As Barner explained, that’s how stakeholders feel when Procurement gives them data without a story.
Now imagine that data plotted on a graph as a trendline. Suddenly, you can understand what’s happening and why it matters. Stories work the same way. They give context to data so stakeholders don’t have to piece together why it matters.
Telling an effective story boils down to three considerations: understanding what matters to each stakeholder, understanding what matters to the business as a whole, and clearly defining success.
As we’ve seen, the first consideration allowed Caharel to earn the investment and trust needed to build Christian Dior Couture’s procurement organization from the ground. However, the second consideration can be tricky simply because you may often feel like the goalposts of success are moving.
It’s true that what matters to the business is often in flux, especially in today’s world where mounting tensions across the globe seem ready to cascade disruptions at any moment. That’s why Laprée explains that Procurement must stay agile and always focus on what benefits the business as a whole.
“If you deliver something that is not good for the business or if something is good for the business, but not for you, there are two things. Either you’re not tracking the right things and you should change, or you’ve been tracking the right thing, but the situation has changed. So if you have a good conversation line with the leadership, then it’s always a good opportunity to adjust, and this agility, this flexibility is really important, to equal to the theme of this webinar, in turbulent times. Procurement needs to have this agility and have the ability, through data and tools, to adjust what they are tracking, because the business reality might require different KPIs, and that might change 2 to 3 times in a year.”
Finally, Procurement should set success criteria with key stakeholders. No matter how you frame data and value stories, you’ll never make progress if the people you’re working with see failure where you expected them to see success.
The good news is that the problem is simple. Just take some time to talk to your stakeholders about the expected outcomes. “The main problem I’ve seen discussing with finance on my savings in my life was because we did not agree on the baseline in the first place,” Laprée explained. “So whenever you have a project in your pipeline, put some governance with finance…that’s really what [SpendHQ] stands for is getting procurement to have this pipeline and to build the alignment and the governance throughout so that it’s not a question. The problem of trust immediately disappears.”
Conclusion
Alignment with the rest of the business is critical to Procurement success. However, if you learn how to use data to your advantage, trust and alignment will become a natural byproduct of your daily operations.
This Art of Procurement Live Session with Yannick Caharel and Pierre Laprée was an excellent primer on turning your data into value stories. In fact, this recap only covers a small portion of the value Caharel and Laprée shared.
We highly recommend checking out the full session, where the team discussed:
- How telling better ‘value’ and ‘data’ stories can enhance procurement’s internal brand and impact
- The importance of properly addressing your audience with the metrics and KPIs that matter to them
- Why measuring value and then presenting it properly are such a powerful combination
