If you think your procurement team can get away without market intelligence, think again.
The PIU’s latest survey, CPO 2012, which interviewed 250 respondents across sectors and from around the globe, made an interesting revelation: all procurement staff, regardless of role, dedicate time to market intelligence and perhaps even more of a surprise was the finding that CPOs, category managers, buyers and analysts all alike tend to spend up to a quarter of their time on the gathering of market intelligence.
The benefits of gathering information from the supply side are numerous. They range from understanding your suppliers better, helping to prepare for contract negotiations, developing category strategies, to spotting the types of solutions that are being offered. Ultimately, having access to good quality and relevant market intelligence gives us the confidence in running an efficient procurement organisation.
But how do we ensure that we go to those sources that will maximise our knowledge on the market, and to add, that they are trustworthy enough? The most popular source for market intelligence seems to be suppliers, indicated by a staggering 92% of survey respondents. Some 80% rely on low-cost sources such as the internet and newspapers, but 60% still use costly management consultancies to provide market information. It is further noteworthy that a fifth of respondents (20%) actively use newer information channels, namely social media, to get to the information they need.
The fact that we first and foremost tap into our suppliers for market knowledge is reassuring, as it suggests that we collaborate with our suppliers and trust them on information that will help us our organisations. However, supplier intelligence does not come without bias. To get a true picture of the market, we need to need to add an extra layer to the market intelligence we gather, and by that I mean cross-referencing our sources and ultimately, painting a picture of our own.