Turbocharge your category strategy execution & drive continuous business value
Category owners invest significant time in stakeholder engagement, in data gathering, cleansing and analysis and in collecting key business requirements together with comprehending market dynamics to formulate the right category strategies.
However, creating category strategies and communicating those effectively is only 50% of the process. The most impactful part of this process is preparation and execution of the defined strategies and reporting created business value. Unfortunately, here is where most of the category owners face many challenges that they cannot overcome.
Based on our latest survey back in January 2024, here are the key challenges:
- Lack of trust in the opportunities and assessment by stakeholders
- Hidden relevant opportunities due to complex landscape of data infrastructure
- External market dynamic
Based on our survey it is estimated that over 40% of identified opportunities are not being executed (and therefore converted to business value) due to one or more of the abovementioned challenges.
Thankfully today category owners are able to benefit from the recent technological advancement like Artificial Intelligence. According to Gartner “procurement technology is rapidly evolving and changing how procurement will be executed in the future.”
Imagine an augmented process where data analysis and visibility, opportunity assessment and validation, and monitoring execution is supported by AI agents. It allows category owners to solely focus on strategy development, stakeholder alignment (both internally and externally) and business impact recognition.
In this new world, category owners are experiencing a significant shift in their daily activities. A massive portion of current activities with lower business value will be replaced by data-backed interactions with key stakeholders. They can now also invest more time in understanding end customer requirements and connecting those all the way back into specification and potential innovation through the supplier base.
This is the ultimate value delivery through category management which so far primarily existed for a handful of organizations, but this no longer needs to be the case .
This January 2024 we have launched the Business Case Generator ™ which is going to reinvent the Plan-to-Strategy (P2S) process for category owners. Think about replacing a tedious twelve step process by only six steps (50% cycle time cut) powered by AI agents doing the homework across each of the optimized steps and only require human review and feedback.
In this new augmented process, category owners and all stakeholders have visibility on all six steps and can provide feedback which will be learned by the Ai agent and never forgotten. Once the strategy is formulated and selected, the solution presents all relevant opportunities to users, considering the supplier base, category and sub-categories, and the geography. External risk factors are also incorporated based on the latest news and market dynamics related to the supplier base. This ensures that the auto-generated business cases are thoroughly evaluated and adjusted before being included in the active pipeline.
Most importantly, once this business cases are getting into execution mode, the Ai agents can review the trends across each opportunity and proactively inform category owner and only relevant stakeholders on whether they are ahead, on plan and behind the estimation and what is the root cause before it happens.
Category owners will experience tremendously reduction in stakeholder alignment efforts (months to weeks to days) and can find at least 20% to 40% more opportunities. Also, the yield in the execution will be significantly higher (over 40%) due to automated assist and the fast learning curve built into this process. Assuming 100 millions spend, depending on the industry, maturity level and demand consolidation complexity, the realized savings could be increased by an additional 6 to 10 millions.
This is the new world that we are living in and according to Gartner:” Procurement organizations that do not embrace AI technologies will find themselves at a cost and agility deficit compared to their competitors.” This is the world in which category management philosophy reaches its highest potential to create an un-interrupted value from customer requirements up to supplier base.
(*) Gartner report: ”Predicts 2024: CPOs Adjust to Technology’s Impact on Procurement”
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