Data analytics has the power to ramp up your business’s performance in the public sector, but what is it exactly and how can you optimise it to get an edge over your competitors?
We’re going to look at why data-driven B2G strategies are so important in procurement and how to use procurement analytics effectively for government contracts. We’re also going to explore the different types of procurement analytics you can use to achieve your goals.
But first …
Competitor Analysis In Public Sector Procurement
Data analysis has many benefits that can set suppliers apart from their competitors in the crowded public sector.
Thorough competitor analysis enables you to anticipate their decisions, so you can decide whether it’s worth competing for the same contracts or better to bid on different opportunities.
Understanding your competitors enables you to make smarter marketing decisions so you don’t waste time on ineffective strategies but can plan marketing campaigns that will leave your competitors eating your dust.
What Does Competitor Analysis Entail?
Research, it requires a lot of research.
You need to identify your direct and indirect competitors. Then you need to investigate their products, marketing methods, business operations, past performance, and success rate. Once you’ve crunched all the data, you should be able to anticipate the solutions they’re likely to put forward in their bids.
You also need market research to get a comprehensive view of the public procurement market in your field, drilling down to the specific goods, services, or works you provide.
Finally, data must always be up to date, which requires ongoing research and data analysis. You don’t want to work from outdated info that renders your strategies useless.
If you’re an SME or charitable organisation, you’re unlikely to have the staff or resources to dedicate to in-depth research and analysis. That’s ok because B2G marketing companies can help you with this specialised service.
Where Is All This Information?
You can get a lot of procurement data from contract award notices on tender alerts platforms. Information available typically includes the company that won the contract, bid value, and contract duration.
Bidders conferences and industry events are great to meet your competition and buyers face-to-face.
Don’t underestimate Google as a tool for data collection. For a start, it helps you identify direct and indirect competitors.
Direct competitors provide the same services as you. Indirect competitors provide different services that nevertheless provide the solutions specified in contracts. Google leads you to their websites, blogs, social media accounts, webinars, ebooks – everything they’ve published online.
You’ll see reviews so you get an idea of how well they perform – as well as their reputation for customer service.
Putting Data To Good Use
Understanding your competitors and their role in the market enables you to adapt your brand to make it more memorable. It helps to develop your story for storytelling marketing, which is a good way to connect with buyers on a human level. Where there is empathy, there is often subconscious favour – provided you meet the contract’s criteria.
Now is the time to look seriously at your services, goods, or works. Where can you improve? It’s not good enough to know how to sell yourself in a bid. You need to back it up with stellar products or services.
Gather your team and brainstorm innovative ideas to redevelop or revamp your business offerings. It could be anything from new energy-efficient processes to brand new products or services that fill a gap you’ve just spotted.
It’s Time For Procurement Data Analysis
It’s easy to talk about understanding data to give yourself a competitive edge, but the question is, how does procurement analytics work?
Types of Procurement Analysis
Suppliers tend to use one or more of four types of analytics.
1) Descriptive analytics
Data describes what happened in the past. Understanding past procurement data can help forecast the future.
2) Diagnostic analytics
Data is used to understand why events happened in the past. Again, this plays a role in future procurement performance.
3) Predictive analytics
Data identifies trends and patterns. When combined with past and existing data, it’s possible to forecast future performance. This helps derive actionable insights and develop procurement strategies for future contracts.
4) Prescriptive analytics
Procurement data from predictive analytics is used to plan and develop strategies for future contracts and decision-making.
The current trend is on prescriptive analytics and the increasing role of AI and automation in procurement processes. As procurement analytics tools become more sophisticated, analysing and delivering increasingly pertinent information, so does the procurement process and supplier performance.
Specific Procurement Data Analytics
There are several types of procurement analytics that enhance procurement functions and boost business performance. There are some, like spend analytics, risk analytics, and procurement lifecycle analytics, that have been used for decades. However, there are three relatively new types very relevant to tendering under the new Procurement Act 2023.
- Diversity analytics: Data that improves your social value, as it analyses social responsibility and diversity in the supply chain.
- Sustainability analytics: Data that helps you meet net zero goals and develop social value initiatives. It focuses on environment, labour, human rights, ethics, and sustainable procurement targets up and down the supply chain.
- CO2 analytics: Data that is invaluable when it comes to net zero goals as it analyses scope 1, 2, and 3 emissions.
How To Analyse Data
You have two options.
- Employ a data analyst
- Use advanced data analytics tools
Data analyst
A specialist who analyses data and draws insights that drive your business forward. Data covers everything from contract negotiations to smoother procurement processes. Moreover, procurement analysts provide key performance indicators (KPIs) so you can track successful goals and identify problem areas.
Some more on KPIs and procurement metrics.
KPIs and metrics assess performance, even comparing you to your competitors. There are many metrics in procurement analytics, but some that have the biggest impact include:
Spend vs. Budget
Spend is the money that actually leaves your business, while budget is the money you allocated for spending. You want the amounts to match. It shows that your cost management is spot-on.
Total Cost of Ownership
This is the entire cost of procurement with sundries, miscellaneous, direct, and indirect costs thrown in. It tells you if the ROI justifies the economic value of an investment.
Cost Avoidance
This isn’t cost savings. It’s avoiding costs altogether. It’s considered part of procurement performance, so it’s actually a measure of success.
Contract Coverage
This is the spend covered by a contract. Increasing spend can generate savings. It doesn’t cover maverick (off contract) spend, which can increase final costs.
Procurement analytics software
Analytics software has distinct advantages over analysts because it can work continuously, crunching and analysing data from multiple data sources in real time. It ensures greater accuracy and is scalable, so it adapts to your changing needs immediately.
Software has another big advantage over analysts: Speed. Analysis, interpretation, reports, recommendations, they all happen at the speed of light. No matter how good analysts are, they’re never going to be superhuman.
Lightning fast software enables you to take immediate action to capitalise on opportunities and avoid risks. You can improve your processes, products, or services and save money.
There is actually a third option. You can have an analyst manage procurement analytics software. You benefit from software’s speed and accuracy and input from someone who understands your business and doesn’t just present cold, hard facts.
SMEs have a fourth option: Advanced procurement analytics software and outsourced data analysts. All the benefits of an analyst without the cost of a permanent employee. You sacrifice some speed, but it’s OK because you still get human insight for effective decision-making.
Predictive Analytics In Government Contracts
We’ve mentioned the growing emphasis on predictive analytics, now let’s look at the specific benefits for buyers and suppliers in public procurement.
Risk management
There’s nothing like being able to see potential future risks and taking steps to avoid them.
Demand forecasting
Anticipate trends in demand so you’re not caught with too much or not enough stock. Instead, there’s time to perfect your inventory management.
Supplier performance
At first glance it seems like a buyer benefit, but it’s like competitor analysis for suppliers. Both parties identify rising suppliers. Buyers keep an eye on promising suppliers, bearing them in mind for future contracts. Suppliers see what their competitors are doing, so they can improve their game and come out tops.
Contract management
Buyers and suppliers can find out more about each other’s previous contracts and behaviour. This is handy for negotiations because you both have data that predicts the future market. It’s interesting to see if you bring similar forecasts to the table and end negotiations in stalemate.
Fraud detection
Accurate forecasting picks up anomalies in supplier/buyer/competitor behaviour. Suspicious patterns come to light, which is particularly important considering the new Act’s emphasis on transparency and fairness in procurement.
Fair competition
Because predictive analytics looks into a possible future and doesn’t deal with the here and now, you can evaluate data objectively. This is important because merit comes to the fore in evaluating bids. Everyone is on an equal footing, so SMEs can compete against larger businesses for government contract opportunities.
It’s Hard Work. Get Help Where You Can
You can have advanced procurement analytics software, you can have the best analyst, but sometimes you need an extra helping hand. Sometimes you need someone who specialises in the B2G market to give you assistance.
Cadence Marketing, backed by its parent company BiP Solutions, has decades of B2G experience. working with buyers and suppliers in procurement. Services for buyers include market intelligence, while suppliers benefit from boosted brand awareness.
Whether you’re an SME looking to establish yourself in the B2G market, or are a larger business looking for a fresh marketing strategy, we’ve got you covered. Contact us to book a free consultation and find out for yourself how we can enhance your success.
