Flipping the Script from Reactive to Proactive with Prescriptive Analytics (Part 4)

Do you ever wish you could predict the future?

Well, maybe you can.

We can’t help you predict who will win the Super Bowl or the World Cup, but when it comes to procurement, predicting the future is a superpower you might actually get.

Imagine if you could predict if a shipment was going to be late before you even ordered it.

Or you could foresee when a supplier was going to have qualification or performance issues.

Just think about the possibilities of that for a second.

No more late shipments. No more underperforming sourcing events. No more quality or quantity issues.

It would put procurement firmly in the driver’s seat, proactively identifying and mitigating potential risks. No more reacting to things as they occur, but truly getting ahead.

Predictive vs Prescriptive

The key is using data analytics to unlock insights.

Two specific kinds of analytics to be exact, predictive analytics and prescriptive analytics.

Predictive Analytics

This is your classic “predict the future” example, but instead of using a crystal ball, you’re using tons of data.

By combining a lot of historical data and third-party data sources an application can accurately predict an outcome within a certain degree.

One of the best examples I can think of is JAGGAER’s On-Time Delivery Predictor in which the solution can predict if a shipment will be on time or late based on a variety of data inputs and can be upwards of 95% accurate.

Prescriptive Analytics

Predictive analytics are great and really powerful, but the beauty of prescriptive analytics is that it takes the process to the next level.

Now, building on the prediction “XYZ shipment will be late by 7 days” or “this sourcing event is at risk to underperform” the prescriptive analytics will tell you what to do about it.

It’s the “okay, and?” at the end of the prediction.

Predictive analytics will tell you that oil prices are rising by 12%. Okay, and?

You should consider renegotiating with these 5 suppliers at this suggested rate to save X% this quarter.

It takes out the guesswork. All the data in the world can’t move the needle if the data isn’t clear and actionable.

JAGGAER Advise

As part of our ‘Digital Mind’ project, we’ve launched a series of new standalone solutions, with Advise being one the most advanced.

Although still in the early adopter stage, Advise brings together predictive and prescriptive analytics, and eventually, fully cognitive capabilities.

The tagline for Advise is simple — analyze, recommend, execute — but let me break down what this actually means.

Behind the Scenes Embedded Intelligence

Advise works in the background, constantly keeping an eye on your data.

This means you won’t have to click in and out of different platforms to make decisions or get insights.

Advise is proactive for you. It will let you know of potential risks without you needing to investigate yourself. You can correct course with just one click.

Instead of you needing to go into the system and check for something to do, the system will let you know what to do proactively. This shift in how we interact with technology is crucial to move procurement forward.

Not only that but the nature of machine learning means that it will constantly be learning and looking for improvements. Every action is considered, every data point and outcome are stored.

The cost and time savings of this is pretty clear. You’ll be able to make decisions faster and always have the peace of mind that you’re making data driven decisions.

Weight off your Shoulders

All of that sounds great, but it’ll take a whole team dedicated to chasing down and addressing the recommendations and risks Advise brings up right? Wrong.

Advise handles it all for you. Sure certain aspects may need more intervention, but the majority of actions Advise can take care of with a single click.

It’s not just the analysis and recommendations that it takes off your plate, but the time spent acting on them.

You’ll get a notification with a recommendation (or several to choose from) and you simply choose, and the technology carries it out.

I know I harp on it a lot, but that frees you up for value-adding work.

Even more, Advises’ recommendations might be something your team has never considered before. It can help you think outside the box, learn new approaches to situations, and ultimately upskill the entire team to think more strategically.

From Reactive to Proactive

Innovation by itself won’t get you anywhere, it’s what you do with it.

This whole series has been centered around one main idea: Getting a seat at the “strategic business table” by leaning into innovation.

Want to know the best way to get a seat at the table? Show your value.

Being proactive in your approach is key to that. Get ahead of risks, optimize processes before they become a problem, and don’t get blindsided by disruptions.

You get a seat at the table by being able to show your strategic value and by being able to speak a CEO’s language.

The #1 thing CEOs all over the world care about is revenue. Period.

Use the insights, recommendations, and reporting that Advise can offer to show your strategic value and cost savings to the bottom line, and you will finally unlock procurement’s full potential.

An ‘End’ to the Journey

Although the end of this series, it’s definitively not an end to innovation or what we’re doing with our Digital Mind.

We’ve covered a lot.

Unlocking procurement’s potential through innovation. Increasing digital adoption.

Using smart assistants to reduce friction and automate tasks. And now, combining advanced predictive and prescriptive analytics.

But, if there’s one thing I want to leave you with is this: In order to really unlock procurements value and get a seat at the table you have to prove your value.

I think the best way to do that is innovation, but it will look different for everyone.

Focus on what top leadership cares about (revenue and growth) and show them how you’re making a difference, not just by reducing cost, but by creating value.

Once you do that, you’ll get their full attention, and procurement can finally take that final step towards strategic value instead of simple cost reduction.

To catch up on the other parts of this series check out Part 1: Starting an Innovation Revolution, Part 2: Solving Digital Adoption, and Part 3: How Smart Assistants are Changing an Industry.

Want to do a deep dive on digital transformation and get step-by-step best practices? Check out our new practical guide to autonomous procurement!