The emergence of Big Data has created a demand in the ability to understand and make sense out of an increasingly amount structured and unstructured information. The increased interest in analytics has given rise to a “culture of analysis” where procurement now sees:
- More data is being collected with an increased portion of this data to be analyzed coming from unstructured data sources such as pdf files, PPTs, emails, blog entries, wikis, word processing documents, photos, graphic images, videos, streaming instrument data, and webpages.
- A wider group of individuals both within and around procurement needing access to spend and supplier information for managing complex areas such as supplier risk, savings tracking, internal and regulatory compliance, and corporate social responsibility initiatives.
- Much of the data being collected today coming from external sources or other managed providers of data (D&B, LexisNexis, etc.) that can integrate and enhance data provided from enterprise systems such as Procurement/Sourcing systems, ERP or PLM.
So, what’s being done in procurement to stay ahead of the curve?
To start, many procurement executives are taking the leap into investing in spend analysis tools over the next several years. Just looking at some of the latest research from some of the leading consultancies points to this:
- An Accenture study from 2012 finds that 68% of survey respondents rated their senior management team (including procurement) as a whole to be engaged with and committed to analytics and fact-based decision-making.
- IBM’s Chief Procurement Officer Study in 2013 suggests that investment in a 360 degree view of supplier relationships / procurement performance dashboards are on the rise, and are seen as solutions/and or activities that will add the most value to the enterprise in the next three years.
- Deloitte’s Global CPO Survey 2013 shows 58 percent of 180 CPOs envisage some investment in spend analytics over the next twelve months considering the current barriers to spend analysis such as data quality, data availability and skills/capability.
But in an age that is screaming for better response time for taking action information in the age of “Big Data”, most organizations today still struggle to understand how to effectively manage spend analysis programs. Collecting more information does not necessarily translate into better results, if it cannot be easily searched and interpreted.
What this means is that, with all the focus on analysis, the ability to easily create relationships, understand patterns, and easily change the level of detail related to data being presented will be the most critical aspect to the success of these latest efforts.
Much of this is based on the trends like the development of agile Business Intelligence (BI) that improves business discovery and self-service capabilities – translation: As a procurement executive or manager, I can easily find what I want, and share my findings with my team to collaborate on potential actions.
As we enter 2014 and look back at some of the fundamental changes in procurement and IT general, it is clear that the effective use of analytics and business intelligence will become a competitive advantage. How is your organization handling this data collection challenge? What is your organization doing to ensure money is well spent on Business Intelligence that can be the most impactful? Comment below or tweet us @iasta.
PS: Join us for a Webinar on February 13 at 11am ET: Improving Supplier Risk Management in the Age of Big Data. Get a handle on managing the information dilemma. Click here for more information and to register.