In the fast-paced world of procurement and contract management, sourcing managers face a daunting challenge: negotiating and managing an ever-growing number of contracts while operating under tight resource constraints. With an overwhelming volume of contracts to handle, sourcing managers are unable to dedicate equal portions of their time and attention to each individual agreement, necessitating a more strategic approach to contract prioritization. 

Strategic Contract Prioritization

To address this challenge, sourcing managers can use this data to identify Cost Centers, internal business groups, with high-value contracts that are expiring. Surfacing these internal groups automatically allows Sourcing Managers to proactively foster strong relationships with key Cost Centers and better stay on top of their sourcing needs.

The challenge lies in identifying the cost centers that house the high-impact contracts and offer long-term partnership potential. To identify the high-value contracts within each cost center, the most fruitful approach seemed to be a data-driven tailored metric system, and using the right tools.

Assessing Data Viability With DataChat 

A key aspect of this analysis proved to be finding reliable and relevant datasets. Our client has a large and diverse data landscape with multiple tables containing the same information with small but important differences. Understanding these differences and locating the correct data proved to be no small challenge, as ideally, the contact information could be supplemented by other data sources, such as the associated invoice. We mitigated this hurdle with DataChat’s ability to quickly load and describe data:

Quick descriptions of key columns and quick visualizations made understanding the data and assessing its viability much more efficient. Understanding details, such as the count of null records in certain columns, expedited the process of pinpointing bad join criteria, as well as what tables had failed to join. In the case of fully successful joins, using the visualization suite to quickly audition charts and understand key relationships proved to be instrumental in identifying which data sources would be most useful.

Data-Driven Metric System 

To address the challenge of identifying high-value contracts within each cost center, we employed a data-driven tailored metric system using DataChat's analytics tools. Pertinent data from diverse sources, including supplier information, invoice records, purchase orders,

purchase requisitions, and spending data, were integrated to provide a comprehensive view of the contract landscape. 

These key metrics, including contract value, expiration dates, supplier performance, and other strategic indicators like turnaround time from PR to PO, added a quantifiable metric to the value of contracts within each cost center. We further filtered the data to focus on actionable areas with indirect and addressable spend. The final metric, a KPI, measured the number of dollars on expiring contracts with both this indirect and addressable spend. 

The resulting metric system provided sourcing managers with a valuable tool to pinpoint high-value contracts, prioritize efforts, and optimize resource allocation to establish strategic partnerships with cost centers, driving maximum benefits for both sourcing managers, and the overall organization. 

Understanding Cost Center Impact 

To gain a deeper understanding of the impact of cost centers, we aggregated deals to the level of their associated cost centers. This approach provided valuable insights into the number of contracts or deals where spend is already managed, average turnaround time, and the frequency of recommended supplier usage. By integrating data from diverse sources, we gave the sourcing managers a more comprehensive and detailed view of the contract landscape. They can evaluate critical elements such as historical spending patterns, supplier performance, and contractual obligations, enabling a deeper understanding of the potential value within each cost center.

This holistic approach enables sourcing managers to make well-informed decisions and allocate resources more effectively, fostering successful partnerships and driving maximum value for the organization.

Data-Driven Value Creation 

In this analysis, we present a data-first approach that offers a compelling solution for sourcing managers grappling with the intricacies of contract management. Through a tailored metric system, Sourcing Managers can easily surface Cost Centers to target with high-value, actionable contracts. Taking this approach enables them to establish strategic partnerships and prioritize their effort and time. This approach can be used more generally across the business world, to not only understand your KPI, but also what impacts it. The integration of DataChat's advanced analytics tools further bolster this process by expediting crucial tasks such as data viability assessment and wrangling was key for turning around a speedy and streamlined analysis.


DataChat is a cohesive analytics platform that uses natural language to make a broad range of data science tools, including data wrangling, preparation, exploration, visualization, and predictive modeling, accessible to everyone to improve business outcomes. Contact us or schedule a demo to learn more about how DataChat can help you improve your business outcomes.

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