As leaders look to procurement to generate greater value, analytics offers procurement professionals a competitive advantage.

Analytics. It is a word that strikes procurement professionals in different ways. For some, it is the must-have tool for taking procurement into the future. For others, just how it will help sourcing is unclear. And for many, it is a source of anxiety: How do I acquire the analytics I need when I don't understand analytics in the first place?

Indeed, as companies beef up their competitiveness, leadership expects procurement to generate additional value beyond cost. In turn, procurement is contributing more to strategic differentiation. Analytics is key to that growth: Spend analytics vastly improves visibility on purchased goods, services, and opportunity identification (see figure 1). Advanced bid analysis helps sourcing experts deftly juggle conditional discounts and alternative bids. And cost regression analysis pinpoints unusually high vendor pricing for a negotiating advantage.