Building a Procurement Dashboard? Here are Four Must-Haves
There are three reasons that data runs businesses—it shows you where you are, it enables collaboration, and it guides you to success. This isn’t a secret, and yet a recent study we conducted with Procurious revealed that 79% of non-Procurement executives have little to no confidence in Procurement’s data. Even worse, almost half of Procurement practitioners have serious doubts about their data accuracy!
If this situation sounds familiar, fixing it as soon as possible is of paramount importance. Not only does your future strategic involvement depend on it, but the business’ bottom line does too. Clearly, some sort of dashboard is necessary to create visibility and make it easier to interpret your data. So, if you’re thinking of building your own, here are four core pillars you can’t live without.
A holistic spend breakdown by category
Off the bat, you should know that a procurement dashboard will be irrelevant if it doesn’t show you all of your spend. A dashboard that offers limited spend visibility will only further your data confidence problems. It will also lead to wasted resources as incomplete data creates red herrings and misleading perspectives on addressable spend.
However, spend data is also a lot like an optical illusion or a Magic Eye picture—looking at it is rarely enough to figure out what’s really going on. Instead, you need to pick it up and spin it around so you can see it from different angles. Only then will you see the picture or the individual elements for what they are.
Spend data works in the same way. Looking at your numbers can tell you that the business spent $10 million on MRO last year. But slicing and dicing the data may reveal that Tom in the Toronto factory increased costs by 14% by buying outside of contract.
Diving into your data may also show you that one of your smallest subcategories has ballooned into one of your most expensive over the past six months. But because most of it’s with one supplier, you have a golden contract opportunity on the table.
If your procurement dashboard doesn’t enable this kind of analysis, it’s limiting your impact. Procurement relies on being able to make informed decisions, and the best information comes from flexibility and accuracy. If you’re going to build your own dashboard, you need a way to see your spend cube from every possible angle.
An overview of your procurement project pipeline
Procurement may have a strategic focus, but the day-to-day realities are usually far from organized. Because of mergers, decentralization, and fragmented systems, leaders often handle procurement performance management in silos. Add in the natural difficulties of project management, and you’ll need a dashboard with project tracking capabilities just to keep your head above water.
Of course, project management is only as effective as the accountability that comes with it. One of the most important facets of your new project tracking module will be transparency. Not only do you need to be able to create parent projects and assign child tasks, you and other key stakeholders need to be able to track progress and results.
Your new procurement dashboard will also need reporting. While individualized transparency is great for accountability, reporting enables leadership and other departments to stay updated on Procurement’s initiatives and their overall successes at a glance.
Contract tracking and management
Let’s face it, Procurement’s most lasting wins come from contracts. They nail down savings, set expectations, and act as the glue between your company and your favorite suppliers. The quickest way to change that fact is to let contracts expire by losing track of them.
As we’ve already established, the internal workings of Procurement can feel wild and chaotic on any given day. The increasing interconnectedness of global business and Procurement’s growing strategic impact have only increased the complexity. With all of your team’s responsibilities, tracking contracts in a spreadsheet that you open once a quarter is not enough. Your dashboard cannot function without a contract management module.
The good news for those that want to build something in-house is that this module doesn’t have to be as complex as the first two. You don’t need redlining software or a CMS; you just need something to house documents, track dates, and send alerts. In an ideal world, your contract management module will also include full text search, e-signature capabilities, and grouping/categorization.
Let’s address the obvious rebuttal—there are so many stand-alone contract management tools. Why is this a top-four functionality for your procurement dashboard? Because they all introduce yet another tool into the mix. If you choose a standalone tool, you’ll be managing your contracts in one place while tracking the key metrics that inform your contract strategy in another. That’s a great way to miss valuable insights and let renewals fall through the cracks. However, if both live in your procurement dashboard, contract and category management will become easier and more efficient.
A savings tracker
What brings spend visibility, procurement project management, and contract visibility together? A way to report the results of your hard work! If your dashboard doesn’t have a savings tracker, what’s the point of having it?
In truth, you can have a procurement dashboard without a savings tracker, but it does you a disservice. Again, only 21% of executives outside of Procurement trust the function’s data. That’s a low number, and if you don’t have a way to demonstrate your effectiveness, you’re only making it worse.
So, what should your savings tracker include? The following are good places to start:
- Graphical breakdowns of savings per category/subcategory
- Total financial impact
- Customizable filters
- Negotiated spend figures
- Completed projects and their impact
- Average savings percentage
- Projected/realized savings
- Top savings by project
Of course, since you’re building the dashboard yourself, you can customize it to display savings however you want. We just advise working with stakeholders like Finance, IT, and Operations so that you can communicate your successes in a way that will make your strategic impact clear.
Are you sure you want to build a procurement dashboard?
Let’s face it—everything we’ve listed here is both vital and resource intensive. You can build your own dashboard if you want, but it’s difficult and risky. Not only does building an internal tool from the ground up require time and resources, there’s also no guarantee that it will work the way you anticipate or do what you need it to.
You should also keep in mind that the four factors we’ve mentioned here are just the must-haves. There are countless other functionalities that you need if you want to achieve best-in-class procurement performance management.
So, before you decide to build something yourself, why not take an hour to see what we’ve already built—a strategic procurement platform built on spend analysis and performance management? It takes each of the requirements in this blog to the next level and does so much more to elevate Procurement’s strategic impact. With more than 500 leading procurement teams having already leveraged it to transform their operations, it’s at least worth seeing in action as you plan out your procurement dashboard. Click below now to schedule a complimentary demo and let us show you just what you’ve been missing.
