Procurement analytics: A complete 2025 guide

Procurement data uncovers everything that’s happening across your operations. With it, workflow inefficiencies—like parts of your supply chain that routinely see delays or internal approval bottlenecks that halt workflows—rise to the surface. 

Recent research into the shifting culture of procurement and data analytics shows that cost reduction, sustainability, and risk management are key value propositions for procurement leaders in 2025. But by 2030, innovation will become the most important priority for CPOs. 

According to our 2025 State of Procurement Report, 64 percent of procurement decision-makers cite data analytics as the key to making operational enhancements. With real-time data, you can gain control over your entire network, as well as all costs and internal workflows within it.

But pulling this data from every nook of your operations has its challenges—41 percent of Amazon Business survey respondents said they lack the data to show procurement’s ROI. To make the most of your procurement analytics, you need a solid strategy, robust technology, and a concise guide to optimize your approach.

What is procurement analytics?

Procurement teams use analytics to get a data-driven understanding of everything that happens across your organization’s operations. These metrics pull back the curtain on your supply chain, not only by offering a big-picture perspective but also by digging into individual purchase order (PO) line-item details. 

To take advantage of these insights, your team needs high-quality procurement analytics. The first step in uncovering good data is knowing what types of procurement analytics are at your disposal and where you can find them.

Types of procurement analytics

Most procurement teams use four types of procurement analytics. Together, these categories cover everything from historical data to global supply chain forecasting:

• Descriptive: Identify trends and patterns by assessing historical data sets
• Predictive: Anticipate future supply chain conditions, consumer demand, or price fluctuations with procurement data
• Diagnostic: Find the root cause of a problem so you can resolve it efficiently
• Prescriptive: Make recommendations and find actionable insights based on real-time data

If you have a specific goal for your procurement data, you may focus on one or two types. But to optimize your entire supply chain, your procurement analytics needs to be comprehensive. Every part of your network generates data—so you need a reliable way to gather, organize, and assess it on an ongoing basis.

Where do procurement analytics come from?

The simplest way to break down procurement analytics sources is into two main categories: internal and external. 

Internal procurement analytics

Data that you pull from systems within your organization fall into this category. These sources include:

• Accounting systems
• Accounts payable records
• Invoice and PO management software
• Vendor relationship management tools
• Contract management software
• Requests for proposal data
• Enterprise resource planning systems

External procurement analytics

External procurement analytics includes any data from outside of your organization. This includes:

• Local and global supply chain software
• Market data
• Supplier databases
• Compliance and regulatory systems
• Corporate social responsibility and environmental impact

Depending on your organization’s size and sector, your internal and external data sources may look somewhat different than the ones we’ve listed here. To be useful, it’s important that your procurement analytics dashboard is fully customized to your needs. 

As an early step in the process, craft a thorough list of all the data sources and systems throughout your operations to make sure you gather data from every inch of your workflows.

Customized integrations with your existing systems are key to data transparency and consistency. That’s why Amazon Business built a simple, seamless solution that connects your setup in a way that makes sense for your organization.

Eight benefits of procurement analytics

As you build out your procurement analysis strategy and improve your data quality, you’ll start to see the following benefits:

1. Purchasing visibility: Uncover how you spend every dollar to find savings opportunities
2. Strategic sourcing: Find the right vendor for each part of your network by comparing their prices, performance, and discount offers
3. Optimized supply chain: Build a streamlined network that requires the fewest number of stops when delivering goods to their final destination
4. Industry compliance: View everything that happens across your procurement operations so you can make sure you’re compliant
5. Quality supplier relationships: Create stronger vendor partnerships by using data for greater efficiency and predictability benefiting both parties
6. Cost control: Use your data to optimize spend management, saving you money and boosting profitability for your entire organization
7. Operational efficiency: Remove bottlenecks, setbacks, and confusion to create a smooth procurement process
8. Risk management: Create a risk mitigation strategy that helps your team identify potential problems and avoid costly disruptions

Robust procurement data gives your procurement leaders a competitive advantage when revamping internal operations for long-term growth and profitability.

Procurement analytics examples

For your procurement analytics to be impactful, they must be thorough. As you set up your analytics tools, focus on these examples of procurement data sources:

• Spend analysis: Document how you currently spend money, places where your team may overspend, or financial discrepancies that could lead to higher costs.
• PO accuracy: Review POs for accuracy, uncover sources of rogue spend, and get an in-depth look into PO timelines.
• Supplier compatibility: Take a look at your network to determine if your current suppliers are the best choice for your purchasing goals
• Supplier risk: Assess the potential risk of working with a given supplier, including patterns in supply chain issues, industry reputation, or financial disruptions
• Supplier contract compliance: Monitor supplier performance to see if they meet contract terms
• Spend and demand forecasting: Project future customer demand and predict how market needs could impact your spending
• Supply chain and market predictions: Forecast market shifts based on recent trends in consumer behavior, availability of raw materials, or supply chain disruptions

For each of these examples, you can assign a key performance indicator (KPI) that you’ll use to measure performance and create data benchmarks.

Nine common procurement KPIs

A KPI is a measurable data point that helps you understand everything from predictive analytics to spending patterns. Start with these common KPIs to build a solid data framework:

1. Supplier lead time: Track how long it takes a supplier to deliver goods after a buyer sends you the PO
2. Product defect rate: Measure the number of orders that contain defective or broken items
3. Emergency purchase frequency: Determine the frequency with which you have to make last-minute, emergency orders
4. PO cycle time: Oversee how long it takes your team to create, finalize, and send POs to vendors
5. Compliance rate: Determine how many purchases align with company policies and industry-wide regulations
6. Rogue spend rate: Track the frequency of rogue or maverick spend within your organization
7. Supplier on-time delivery rate: Measure how often your vendors deliver orders on time
8. Inventory holding costs: Monitor the total cost of holding inventory during stops throughout the delivery process
9. Inventory turnover: Find the rate at which your team sells, uses, or replaces inventory

Measuring every KPI at once might not make sense. Instead, take a close look at your operational weak points, talk to stakeholders, and review your current data to understand which areas of your procurement process cost the most time and money. Based on your findings, you can then prioritize the KPIs that will have the most positive impact. 

Use cases for procurement analytics

Once you know which KPIs you’ll track, the next step is putting them to use. Here’s how: 

• Supplier price comparisons: Compare vendors side by side to see which one is the most cost-effective option for your network
• Resolve operational bottlenecks: Uncover where unnecessary obstacles in your workflow create costly setbacks and fix them
• Forecast consumer demand and market trends: Anticipate consumer needs to order the correct amount of inventory and optimize your supply chain to meet demand
• Anticipate global supply chain shifts: Monitor the supply chain to instantly see when wide-scale shifts could trickle down to and impact your network
• Streamline your supply chain: Find the most efficient route to move goods to their final destination to save time and money
• Negotiate more favorable contracts: Use visibility into your supply chain, finances, and vendor performance to get a leg up when negotiating contracts
• Cost control: Manage your spending to optimize where you put every dollar, stay on or under budget, and create realistic budgets

Real-time procurement analytics give your team the actionable insights they need to make data-driven decisions that impact your entire organization. 

How to implement procurement analytics in your business

Procurement analytics doesn’t offer a one-size-fits-all technique. Your organization’s size, industry, and existing workflows impact how you’ll approach analytics. 

Use this simple four-step strategy to discover what approach will work best for you:

• Connectivity: Determine which data sources you need to pull from, whether from within or outside the organization
• Adaptability: Decide if you need a solution that fits into your team’s existing process, workflow, or structure for ongoing data enrichment
• Transparency: Figure out if you need industry-wide, in-depth procurement data or if internal data alone is enough for quality business decisions
• Speed: Establish how frequently you’ll need updated analytics to maintain a reliable business intelligence baseline

You can do periodic audits if you have a relatively small supply chain with only a handful of suppliers and tame spend analytics. However, if you have a complex supply chain that’s subject to global shifts, work with many suppliers, or need complicated category management, you’ll want automation for your data analytics. In this case, investing in analytics software may be worthwhile.

How to turn procurement data into actionable analytics

Once you know how you want to use your procurement data, you’ll need to transform it into actionable insights. Here’s how you can do so:

• Extract data into one place: Centralize procurement data so it’s easily accessible
• Clean up the data: Tidy up your data to remove duplicates and resolve gaps so you can work with accurate information
• Categorize data based on KPIs: Organize your data based on KPIs to understand how each data point relates to specific areas of your workflow
• Report on data trends or patterns: Uncover trends that reveal opportunities for cost reduction or potential risk factors for each KPI
• Respond to data results: Create a series of actionable steps to boost efficiency, mitigate risk, and save money based on your data

While one-time audits give your team helpful information, they’re only a snapshot of your operations. For long-term resilience and optimization, you’ll need routine data analysis with the help of a robust procurement analytics solution. 

Our solution automates and simplifies the process of gathering, analyzing, and displaying procurement data. Simply connect all your systems to create a comprehensive data set and let the software do the rest.

Use real-time procurement analytics for cost savings

Procurement analytics gives your team control over your operations and spending. When you know the current shape of your supply chain and procurement finances, you can optimize your decision-making process to see the greatest impact on your bottom line. 

No matter the size of your operations, centralized procurement analytics makes it easier to turn data sets into impactful cost-saving strategies. Amazon Business connects all your systems to create one go-to place for you to find accurate insights—and increase your confidence in your data analysis.

Get in touch with our sales team today to learn how Amazon Business can support your procurement analytics strategy with real-time insights, customizable reporting, and seamless system integration.