Procurement Intelligence Unit

Procurement intelligence is about far more than bottom-line savings (although that’s obviously one of its most welcome by-products) it's also capable of despatching competitors “to the back of the queue”.

As part of our series of interviews with Neil Deverill, former CPO and current chairman of the Procurement Leaders Network Advisory Board, he told the Procurement Intelligence Unit, that competitive advantage was one of the fundamental drivers behind the expansion of intelligence gathering in the world of procurement.

And although it’s advantages are obvious, once again it’s clear that, in the majority of cases, procurement is only beginning to tap into its potential.

“It has only just started to be understood how little we know about what we’re doing,” says Deverill. “I have a maxim – if you’re going to buy something you need to know as much about the product, the supplier and the market that the supplier is operating in.”

Failure to do so will, he warns, place procurement at a considerable disadvantage.

“If you don’t know as much as the supplier knows then you’re going to lose - you’re going to make a sub-optimal deal,” is his stark warning. “The supplier will know that you don’t know enough, therefore, you’ll get a less beneficial deal than might otherwise have been the case. If you know more then you’re in a far stronger position to engage with the market.”

This is, however, only part of the picture, with Deverill arguing that in a competitive market, with companies often using the same suppliers, it’s imperative that procurement takes a proactive approach.

“A company that is in a competitive market needs to buy from suppliers who are selling to their own competitors,” he says. “So it’s competing for capacity, for knowledge and for preferential treatment from suppliers because its competitors are after the same thing.”

According to Deverill, one key ingredient stands between those companies and a better deal – intelligence.

“The more a company knows about the market, the more it knows about when the market is going to change and when it should go to its suppliers before its competitors do,” he says. “Once it’s aware of that kind of information then it’s going to get a significantly better deal.”

And it’s not just a marginal difference, Deverill argues that this kind of information can ensure a “significantly” better deal, as well as securing supply when capacity might be constrained.

“All of a sudden the competitors are nowhere,” he says. “They’re at the back of the queue.

”Procurement takes its 'queue' in fast lane to success. Procurement intelligence is about far more than bottom-line savings (although that’s obviously one of its most welcome by-products) it's also capable of despatching competitors “to the back of the queue”.