Social Media Essential for Supply Market Intelligence
Providing supply market intelligence generates measureable value. It improves procurement’s results while also contributing to other organizational efforts, including risk mitigation, identification of competitive threats, and merger and acquisition activities. It also improves the image of procurement within the organization, thereby increasing its ability to partner for positive impact.
That’s why Jeanette Jones of Cotrill Research and Kelly Barner, long time blogger and Managing Editor of Buyers Meeting Point, teamed to write Supply Market Intelligence for Procurement Professionals: Research, Processes and Resources (J. Ross Publishing, 2015). The book is a soup to nuts guide to developing accurate, high quality supply market intelligence with the tools and resources available in today’s digital world.
One thing that caught our eye, being the social enterprise that we are, was a section on using social media for research. We talked with Kelly, who’s quite the social media maven, to learn more about how she’s using it for research.
Coupa: You made this really great point in your book about how traditionally a lot sources for supply market research were reports, journals, or books that were created after experts and scholars had time to digest and analyze events and their ramifications, whereas social media captures the news cycle as it unfolds. That’s fairly new and potentially very powerful. Can you talk more about what this means for the research processes?
Kelly: There is no question that we live in a multi-dimensional, multi-channel world. If you're doing research on a topic, should you consult YouTube, Twitter or LinkedIn? Absolutely. One of the ways I do this is to think in hashtags, or keywords.
Let’s say you are a procurement person, and you've had a meeting with your stakeholders. The next step is for you to go off and start either expanding or building your knowledge of a market. Where on earth do you start?
That is an opportunity to think in hashtags. I'm not talking about hashtags like, #DoYourJob where we've got sentences smashed into hashtags.
But you have to be able to look at your notes and see the few words that are relevant. It's a way of condensing a full page of notes down to the three or four critical elements to use in a search, and to then go off and find the associations, or the suppliers, or the regulations, or the raw materials associated with them.
Being able to allow hashtags such as #conflictminerals to pop out at you the way they would in a tweet is a really good structural way to start building a research strategy.
Coupa: Can you compare this to how you did research before there was the web and social media?
Kelly: Obviously, there was a time when you were working with hard copies, actual paper. But mostly what I’ve used were commercial databases. LexisNexis, Dialog, etc. I have a graduate degree in Library Science, and I spent a lot of time learning the languages to be able to search in these databases. The issue with them is that they're expensive. You’re either looking at a hefty subscription fee, or a prohibitively high cost per search.
It’s much easier to get information now. The new challenge is quality control. When you were going to Nexis or Dialog, Dun & Bradstreet, or a Bloomberg terminal, you had a built in assurance that all the content had already been vetted and was from reliable sources.
Now so much information is available widely for free, but is it fact or is it opinion? What is the relationship of the person or the organization that has put this information out to the subject of the material that they're writing about?
So while one step of the process becomes easier, the next step is a lot more difficult. Procurement needs to either validate the source or triangulate the piece of data. You need to find a similar fact that has been cited by several reliable or known sources in order to be able to use it as the basis of a corporate recommendation.
Coupa: That takes time and money too. Is it better to just buy research? Or should you blend paid databases and online searching?
Kelly: It depends. It really is almost part of a category management strategy. If you are looking to validate very general information that a supplier has given you and they're a publicly traded company, there's no need to pay for anything. It's out there on Google, or LinkedIn - their number of employees, where they’re headquartered, financial results if they’re publicly traded.
I had a conversation with somebody recently about the stock RFP templates that a lot of companies use. An awful lot of the information that's in there is publicly available. Why are we even asking suppliers for this information? How often do people actually go validate that in fact it's true?
Coupa: It seems like if you're going to go to the effort to validate it, that’s about the same amount of effort it takes to find it yourself these days.
Kelly: I would say so. If it is publicly available, shouldn't procurement be going and getting this information directly from a reputable source, instead of asking some poor sales person that's typed it a million times into an RFP to type it again?
Coupa: Maybe we could make RFPs a little lighter.
Kelly: Yes. You do still want that standard information. But maybe it becomes more of an internal process where you're saying, "Okay, entry level analyst. This is an awesome opportunity for you to understand the breadth of the suppliers we're going to be dealing with in this category. While you're at it, let's check and see if there are any pending legal cases against the supplier.”
That’s some of what we typically put on RFPs, but nobody ever validates. It's check the box, package it up and shovel it off to the stakeholders and let them look at it.
What does everybody do when they get the copies of all the consolidated RFPs? They flip ahead to the meaty part. Where are the prices? Where is the part where they're going to tell us how they planned to handle our very specific situation?
Part of the case that Jeanette and I are making about supply market intel is that yes, we have a professional background, and lots of people do. That is a worthwhile thing to have. But for the purposes of modern procurement organizations, there is no reason why somebody can't take responsibility for building this kind of basic research capability in-house.
You had asked the question about fee for use. I think a lot of times that's needed where you get into very specialized categories. It is worth having a subscription or an access account to something like Metal Miner or Platts for the fuel industry. That's not necessarily something that procurement will have to fight for.
I think social media can and should be a part of market research strategy. It's certainly not going to be the only place you look.
It's easier and it's harder at the same time, which creates a huge opportunity for the person or the organization willing to take on the task. If you find that little magical bit of information, people are going to look at you and say, "Wow. You took the lead from here to there, and you can back it up with data." It can be a real differentiator.
Next: Kelly’s practical tips for using Twitter for supply market intelligence.