Procurement Analytics Use Cases: How to Prioritize for Fast ROI

Procurement analytics is the crucial process of collecting and analyzing data to gain business insights, allowing organizations to move beyond gut-feel choices. For procurement leaders seeking rapid, measurable results, prioritizing specific analytics use cases is essential. While the adoption of procurement analytics tools has demonstrated high returns, fast ROI hinges on targeting immediate, high-value opportunities. By focusing on descriptive analytics first and then moving toward proactive insights, we at WNS Procurement help teams maximize efficiency and savings.

Prioritization Pillar 1: Leveraging Spend Visibility for Immediate Cost Reduction

The quickest way to realize ROI is by establishing improved spend visibility, which offers a comprehensive understanding of exactly where, how, and with whom money is being spent. The foundational application for this is Spend Analysis, which quantifies procurement performance across efficiency and cost dimensions.

To achieve fast ROI, we prioritize use cases that tackle controllable waste:

• Maverick Spending Reduction: Maverick spending unauthorized purchases outside established processes can cost companies approximately 10–20% of their potential savings. Analytics can reduce this by analyzing purchasing patterns, flagging deviations from preferred supplier agreements, and automating policy enforcement.
• Tail Spend Management: Small, unmanaged purchases (tail spend) can account for 20% of a company’s total spend. Analytics helps identify these areas of waste and automate low-value purchases, freeing up staff for more strategic work.
• Category Savings Identification: Fast wins come from identifying untapped savings by analyzing category-level spend trends. This directly aligns with tracking Spend Under Management, a crucial metric that reflects maturity and control over spending.

Prioritization Pillar 2: Working Capital and Compliance Quick Wins

Two other areas offer rapid financial returns: optimizing working capital and enforcing contract compliance.

Payment Term Analytics is a high-priority use case focused on identifying and acting on working capital improvement opportunities. By harmonizing Average Payment Terms across suppliers, procurement can improve working capital, which can be quantified for savings based on proxies like the cost of borrowing.

Contract Analytics provides value throughout contract lifecycle management. This use case delivers fast ROI by:

• Flagging agreements that are underused or nearing expiration.
• Identifying off-contract purchases or policy violations.

By increasing Contract Coverage—the amount of spend backed by a contract—organizations realize savings and simultaneously reduce compliance risk. Analytics provides the context needed to make well-rounded decisions, turning procurement data into an actionable resource.

Prioritization Pillar 3: Moving to Proactive Insights (Future-Proofing ROI)

While descriptive analytics summarizes what has happened, continuous, higher ROI is driven by leveraging Predictive Analytics and Prescriptive Analytics. These actively inform what actions to take next.

Key future-focused use cases to integrate after securing initial financial wins include:

• Supplier Risk Analytics: Proactively tracking supplier financial health, geopolitical exposure, or delivery reliability helps mitigate risks before they impact the bottom line, preventing cost overruns and ensuring supply chain resilience.
• Sustainability and Diversity Analytics: Use cases like CO2 Analytics and Diversity Analytics support non-financial goals with the same discipline as cost targets. Measuring emissions or ethical sourcing indicators provides traceability for ESG reporting and long-term risk mitigation.

By starting with spend visibility and process efficiency, procurement teams can quickly realize measurable savings, thereby funding the transition to more advanced, predictive strategies. WNS Procurement offers comprehensive Procurement Advisory and Procurement advisory solutions that help clients prioritize these use cases for sustained and future-proof ROI.