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As a spend management solution provider, we often meet procurement teams that are already using or thinking about investing in business intelligence (BI) solutions. But how well do BI tools support their procurement efforts?
Several BI tools are available in the market, where the most common ones are Power BI, Tableau, and Qlik Sense. Although the capabilities across BI tools are relatively generic, they also do differ in terms of functionalities.
Investing in BI tools is often a company-wide initiative driven by management. From a procurement perspective, however, one of the most important questions still remain;
Do BI tools provide adequate support for procurement professionals?
In this article, we'll shed some light on this topic. More specifically, we will discuss the pros and cons of BI tools when compared to procurement analytics solutions.
- For self-service BI tools with basic business analytics features, the licensing costs to get started are usually low but still more expensive than lightweight tools like Excel.
- BI tools facilitate company-wide business analytics and visualizations across multiple data sources.
- Relatively easy to get started and use, but only if you have the necessary data management and analytical skills required.
- Built-in AI capabilities and programming languages tailored to data scientists and business analysts.
- Support for integrating and connecting multiple data sources are native in most BI tools.
- If you want more advanced features, such as big data support, cloud reporting, and advanced analytics, BI tools can be quite expensive. When considering the additional costs related to implementation and support, the total costs will be much higher.
- Users need to have robust data and analytical skillsets to fully utilize BI tools, as they are relatively complicated with many layers. And let's face it; most procurement professionals, and other company-wide resources, are not business analysts.
- The time to value is, in most cases, quite long. Your company needs to invest in resources to build and implement the tools, such as external consultants and internal staff. For example, you need to create dashboards driving procurement insights from scratch.
- Support, updates, and changes need to be performed by IT or BI experts, making the tools less flexible for dynamic procurement functions.
- BI tools don't directly support data management, which is a vital part of managing your spend. For example, classifying spend is a must-have to facilitate category management and drive category insights from a procurement perspective.
- Data security should be a pressing concern when using BI tools to handle sensitive data, as data security is highly questionable. If you use BI tools to manage sensitive information, an error or data breach could severely harm your business.
In conclusion, BI tools provide business analytics possibilities across the entire organization but are costly to implement and manage. Moreover, the inherent complexity and lack of flexibility make it hard for most procurement professionals to support their needs. Keeping pace in a turbo-charged world is more important now than ever, especially for procurement. So why limit your company's solutions to a non-procurement friendly BI tool?
And on a side note, managing your spend is so much more than analyzing and visualizing your procurement data. But to offer a fair comparison, we've only compared the BI tools with our procurement analytics features in this article.