What is a procurement analytics dashboard?

A procurement analytics dashboard is a visual data summary that provides increased visibility into procurement-related details such as spending, supplier performance, inventory, quality defects, on-time delivery rates, payables and more. It helps purchasing, contract and accounts payable teams track KPIs and make better-informed spending decisions.

Understanding spending is critical to improving profitability and overall business performance for most organizations. Like other analytic dashboards, procurement dashboards are used to track, analyze and display key performance indicators (KPIs) and metrics relevant to the business. Accounts payable specialists, purchasing managers and contract managers use them to understand their operations better and make more informed decisions about spending based on the latest relevant business data.

Procurement spend analysis is key

For many organizations, material input costs are among their top spending items. Proactive spend analysis across the supply chain can be a powerful tool in reducing costs, improving profitability, boosting customer satisfaction and gaining a competitive advantage.

Procurement analytics dashboards can help organizations quickly answer a variety of important questions such as:

• Identifying the root cause of unfavorable purchase price variations
• Quantifying off-contract spending that may lead to higher input costs
• Identifying suppliers with quality or delivery issues
• Understanding details impacting efficiency such as PO approval and close cycle times

What to include on a procurement dashboard

Effective procurement dashboards typically track:

• Total spend by supplier, category, location and business unit
• Purchase price variance (PPV): the difference between standard or expected cost and actual price paid
• Off-contract (maverick) spend: purchases made outside negotiated agreements
• Supplier on-time delivery rate and supplier defect rate
• Open purchase orders (POs) and their value
• PO approval and cycle times: time from requisition to PO and from PO to receipt
• Spend under management: the share of spend actively managed by procurement
• Days payable outstanding (DPO): how long the organization takes to pay suppliers

The broader end-to-end flow of inventory, fulfillment and logistics is covered by supply chain analytics.

Types of procurement analytics

• Descriptive analytics shows where spend went and how suppliers performed.
• Diagnostic analytics explains why PPV was unfavorable or why a supplier missed deliveries.
• Predictive analytics forecasts spend, price changes and supplier risk.
• Prescriptive analytics recommends actions such as supplier consolidation, contract renegotiation or sourcing changes.

Procurement dashboard vs. spend analysis report

A spend analysis report is typically a periodic, point-in-time study that classifies historical spend to find savings opportunities. A procurement dashboard is an ongoing, interactive view that refreshes as new transactions arrive and lets users drill from summary KPIs into individual POs, invoices and suppliers. Many organizations use both, relying on the report to set sourcing strategy and the dashboard to monitor execution.

Types of procurement analytics solutions

Most organizations collect data related to purchasing in various operational systems. Building a procurement dashboard from scratch can be time-consuming and difficult. Relevant supplier and purchasing data is often stored in commercial supply chain management (SCM) and enterprise resource planning (ERP) software such as SAP, Oracle E-Business Suite or JD Edwards. Complicating things further, some large organizations may use multiple ERP tools, making it challenging to access and view key metrics consistently across the business.

In the past, building a procurement dashboard required organizations to have an in-depth understanding of each of these applications and how they store data internally. Organizations typically developed ETL pipelines using various data integration tools to extract necessary data and convert it into a form where analysts could easily query it.

Best practices for procurement dashboards

• Standardize supplier and category data across ERPs so spend can be compared consistently.
• Keep transaction-level detail to support root-cause analysis.
• Align KPI definitions with finance, especially for PPV and payables.

Procurement dashboards in Incorta procurement analytics solutions

Fortunately, Incorta provides a much easier way to deploy a procurement dashboard. Incorta is a unified data analytics platform that enables organizations to quickly ingest, enrich, analyze and share data from multiple sources. Incorta's procurement and spend analytics data applications (formerly Blueprints) can help organizations get up and running quickly with the top-line and transaction-level insights that they need to improve their purchasing and contracting team's performance. Incorta data applications are pre-integrated with popular ERP applications.

The procurement and spend analytics data applications pull together key metrics, sample reports and visualizations across multiple functional areas so that analysts can be productive immediately without the need to deploy a complex analytics infrastructure and develop dashboards in-house. The procurement and spend analytics data applications easily answer critical questions including root cause for unfavorable purchase price variance (PPV), which suppliers have quality and delivery issues, what is the off-contract spend for the quarter and more. With metrics such as open POs, approval cycle times, spend by location, product, supplier and other quality and delivery performance metrics, organizations benefit from the granular visibility to better manage profitability and cash flow.