Big data, small data, lots of data. What are we supposed to do with all this data? It can get overwhelming quickly. Many construction companies miss out on critical insights because they're managing procurement manually with excel and email.
But the good news is, if you are already collecting procurement related data, and confident about its quality, the next step is to start tracking key procurement metrics and build meaningful reports for relevant stakeholders.
In this post, let’s explore performance metrics for procurement activities as well as procurement dashboard examples for construction companies/projects.
Firstly, why bother? Procurement data analysis or analytics helps organisation answer questions such as “What happened?”, “Why did it happen?”, “What will happen?” and “What should we do?”.
In short, it helps organisations:
How procurement data analysis is done, what KPIs or metrics are used, can vary across different departments, job roles, stages of the project or vendor relationship lifecycle.
Here, we touch on a few common use cases and metrics, as well as example dashboards that you can set up for yourself or your teams.
To keep construction projects running on schedule and budget, various stakeholders need to pull their weight. While pre-contract teams can get projects off to a good start by ensuring a smooth procurement process and handover, shared visibility at all times is what matters. It means at any point in time, project delivery can see what’s next, or commercial can see what’s left of the financial targets.
Here are a few reports that you can pull to answer questions related to progress, health and correlations.
Purpose: Get a summary of everything at a glance
Purpose: Help central procurement and commercial teams know where to focus efforts to assist projects in budget wins
Top 5 or 10 upcoming packages by value/ date across all projects
Purpose: Analyse a certain dimension of interest to a particular stakeholder
Purpose: Track project health and identify risk mitigation strategies where necessary
Purpose: Identify patterns and opportunities for improvement or prioritisation
Purpose: help with budget planning, optimise financial performance, analyse ROI / cost savings / cost avoidance, help with statutory reporting/compliance
Taking a lifecycle approach to vendor management means constantly analysing experience to ensure lessons are learned and shared.
The train doesn’t stop at awarding a contract. Central procurement and governance risk compliance (GRC) teams can build reports and dashboards to keep building the knowledge of their supply chain.
Vendor relationship management/ Identify at-risk suppliers:
By having a centralised source of truth about your vendors, the possibilities are endless when it comes to slicing and dicing data.
The more technology is implemented across different stages of the vendor lifecycle, the more data points you’ll have to garner insights from. For instance, if you have Vendor Management, Procurement Schedule, Sourcing and Contracts, data can seamlessly flow between the modules, minimising the need to reconcile or clean data before analysis.
Start by exporting data from Felix manually or via our API into procurement analytics tools such as PowerBI, Tableau and Looker. You can also pull data from other systems (e.g. ERP) to enrich the analysis. Then build your own dashboards using data visualisation techniques and voilà, the stats begin to tell stories.
An example dashboard to show sourcing activities
As always, feel free to reach out if you'd like to see how we can help uncover procurement analytics opportunities.
With the many significant events happening around the world right now, it's easier to focus on short-term outcomes to keep the business ticking than to consider longer-term goals. Areas of your business like sustainability may suffer, when in fact, they are the most important ones to focus on right now to ensure future longevity for all.
Three weeks on since we first wrote about the novel coronavirus. Back then, the number of global cases was nearly 200,000. That has now jumped to more than 1.7 million.
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