A joint effort by NASSCOM and CRISIL Global Research & Analytics, this report aims to cover the industry landscape, key drivers and emerging trends for risk and procurement analytics, potential opportunity and India as the leading analytics’ sourcing hub. The report will also have special focus on adoption of analytics across industries and highlight the impact on customers.
Risk analytics is increasingly becoming a core component of risk framework given the complex regulatory environment, market pressures for better risk-adjusted performance, increased market volatility and need to make informed decisions. Therefore risk analytics is increasingly maturing from being a siloed function within finance or investment unit to being integrated across all business units including portfolio, operations, sourcing & procurement, audit and compliance.
Some of the key applications of risk analytics across industries include:
- Enables organisations make better return on investments/informed decision making
- Helps organisations meet regulatory requirements across sectors and geographies
- Improves credit performance to better manage liquidity positions in the banking sector
- Helps insurers across investment decisions, risk exposure, pricing & loss reserving
- Enables capital market firms to manage risk exposure and trading decisions
- Fraudulent losses globally is driving demand for risk analytics to enable fraud detection and mitigation
- Makes social media initiatives secure
Adoption of analytics within procurement is still at a nascent stage. The economic downturn has brought about a vast change in the perception of a procurement department within enterprises, with the discipline moving beyond the traditional ‘cost centre’ to a more strategic role. Procurement analytics has the potential to shape broader business strategy and play a strategic role in delivering business value across the supply chain.
In the near future, the demand for procurement analytics will be primarily driven by:
- Cost cutting & efficiency initiatives: Organisations are increasingly focusing on cost cutting and looking for top-line and bottom-line growth, owing to effects of recession and continuous economic uncertainty, declining sales and constrained margins. Procurement analytics can assist through spend analytics, strategic sourcing, supplier management and invoice management
- Augmenting bottom line through enhanced spend visibility: Procurement analytics has the potential to bolster profit margins of an organisations by 15 per cent and improve information availability, through enhanced spend visibility and supplier collaboration
- Improved vendor management: With growing emphasis on improving supplier relations and rising supply chain complexity, organisations are implementing analytics solutions such as supplier relationship management tools to efficiently manage suppliers
- Lower working capital requirements: Procurement analytics has the potential to release as much as 30 per cent of the working capital through solutions such as inventory optimisation, replenishment planning analytics, demand analytics, sourcing analytics, and procure to pay analytics