What is the purpose of Predictive Analytics or Forecasting?
Predictive analytics (in purchasing) describes key figures, evaluations and chains of analyses that concentrate on prognostic conclusions. For example, a company tries to forecast the purchasing price for certain goods and raw materials, and to make this useful for their own plans in terms of a forecast.
In so-called data management, as well, predictive analytics approaches can aid in forecasting or estimating at an early stage the amounts and usages, in order to foresightedly plan and manage supply chains.
The mathematical/statistical methods of predictive analytics (especially correlations and regressions), nevertheless, work very well in purchasing in order to examine the real effects of cost drivers on the purchase prices or to simulate the effects of possible future currency rate changes on the spend baselines at an early stage.
Modern forecasting approaches in software systems such as SpendControl from Orpheus go even one step further in that they attempt to reveal the effectiveness between procurement levers and the key figures and KPIs in purchasing by means of predictive analytics.
The ongoing objective is to find out which levers in purchasing actually have a significant effect on KPIs such as cost savings, spend, compliance, etc., and which external and internal influencing variables and parameters need to be observed.
Dashboards & Insights
Dashboards & Insights is a complete Procurement Controlling and Spend Management solution. It provides all functions, KPIs and measures needed for professional Spend Analysis.
With its standardized ERP interfaces you can connect the spend cube of Dashboards & Insights within a short time frame to any ERP system (e.g. SAP, Navision, Oracle etc.).
Here you will find important terms related to spend management explained in a clear way. Small knowledge base for quick information or in full for your further education. This controlling glossary is constantly being expanded and improved.
Read blog articles about spend management, initiative management and data management in procurement, or other articles from our experts.
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