Knowledge is power 

Nick Martindale

Having detailed category information has never been more important. Such information means buyers can:

• be better prepared for supplier negotiations;
• benchmark suppliers against each other;
• gain a more telescopic view of their capabilities across multiple categories;
• give procurement more weight in discussions with internal customers.

The growing importance of market intelligence means that many organisations are having to look at the best way to capture and analyse it. The options open to CPOs are to outsource to one of a number of specialist research companies, many of which are based in low-cost countries, or to establish an in-house or offshore facility of their own.

Outsourcing is often the cheaper option, but the quality of information can vary wildly. As a result, firms such as BP and P&G have so far opted for the in-house route.

However companies choose to set themselves up, this is an issue that is set to grow in importance. Phillip Duncan, CPO at Novartis, for example, intends to make it a key part of his strategy for 2009. “At a buyer and category manager level, having good data and market intelligence is fundamental to doing the job properly,” he says.