The Savings metric will disappear!
Savings is an easy metric to manipulate. With AI, better metrics will emerge.
It’s funny how the savings metric in procurement is horrible, yet it won't go away.
The sad reality is that it’s still the most pragmatic metric. But that’s going to change.
Think with me:
- Buyer A lowers an item from R$ 150 to R$ 130. Gets promoted.
- Buyer B holds an increase from R$ 90 to R$ 92 in a crisis scenario. Has to give an explanation.
This is one example. But there are several other distortions.
The right way would be to compare the price of each item a company buys vs. a market average. Historically, this was impossible to do. This is because each company names its items differently, and the match becomes difficult to make.
With AI, several solutions will emerge that allow you to "plug in" your database and see how you compare with the market.
Of course, for services, this is MUCH more complex. That is exactly why Tail was born, to help in the creation of complete and technically precise scopes for services.