Procurement

Big Data: A Big Focus For Procurement Organizations

Share this post:

A business’ capacity to generate and store data has doubled approximately every three years since the 1980s. By 2020, analysts estimate that businesses will have 300 times more data available to them than they do today.

Of course, that data will do little to enhance business objectives unless it can be effectively captured, managed and analyzed. Despite the tremendous growth in data, and greater access to that data, one in three business leaders say they don’t trust the information they use to make decisions.

Therein lies the challenge and opportunity of Big Data.

Big Data is “information of extreme size, diversity and complexity” –  and a “disruptive phenomenon destined to help organizations drive innovation by gaining new and faster insight into their customers [and business].”

The insights available from Big Data can help businesses deepen customer engagement, optimize operations, mitigate risks, and capture new revenues. According to a survey referenced in the Wall Street Journal, nearly two-thirds (64 percent) of businesses have already invested in Big Data technology or plan to begin doing so within the next year.

That same survey details the top reasons business leaders are implementing Big Data programs – and atop the list are operational efficiency (49 percent) and cost reduction (37 percent). If the CEO and CFO see Big Data as something procurement can capitalize upon, perhaps it bears some consideration.

Procurement and supplier management are really ideal grounds for the application of Big Data programs and technologies. They are critical to the business, they produce massive amounts of data, and that data is often widely dispersed across disparate systems and organizations.

Big Data offers procurement organizations the opportunity to consolidate, cleanse and connect spending and supplier data across the global business. It promises to provide visibility and insights that can help reduce costs, drive compliance, mitigate risks, and improve the management and development of suppliers.

Big Data makes the higher level value propositions in procurement possible – from tackling complex spend categories, to proactively mitigating supplier risks, to actively monitoring and developing suppliers.

Technology solutions that can effectively and comprehensively consolidate and connect supplier data across a global organization are fast becoming a core area of technology investment for procurement organizations. Gartner calls this emerging area “Supplier Information Management” and expects investments in it to grow three times faster than any other supply technology through 2015.

IBM’s own Institute for Business Value (IBV) uncovered similar insight from its 2013 Chief Procurement Officer Study, one of the largest known surveys of global procurement organizations. That study found that CPOs consider supplier information management – and specifically technologies that provide a 360-degree global view of suppliers and solutions that help facilitate procurement analytics –as the top priority for technology investment.

The study also found a generally strong correlation between being a top performing procurement organization and effectively leveraging technologies: 94 percent of top performing companies are highly effective in their use of procurement technologies – comparatively 44 percent of all surveyed companies are average or below average in their technology effectiveness.

The study also found that companies with high performing procurement organizations have profit margins 15 percent higher than the average company and 22 percent higher than those of companies with lower performing procurement organizations.

That’s Big Impact.

For further information on the transformative impact of Big Data on Procurement, visit www.rethinkyourcustomer.com/procurement

Product Marketing - Watson Commerce

More stories

IDC Analyst Discusses Top Issues Facing the Banking Industry Today

Retailers are not the only organizations that need to focus on improving the customer experience. Banks are increasingly feeling the pressure to provide exceptional and innovative experiences for their customers and one way to do that is through digital transformation. Spending on digital transformation by US Banks is expected to be $20.3 billion in 2017 […]

Continue reading

Subdue Disruption and Supercharge Your Supply Chain with Watson

IBM has a long history of running a global supply chain. Currently, Joanne Wright, IBM VP Supply Chain, manages a spend of more than $30 Billion for a supply chain that operates in over 170 countries. She undeniably knows what it takes to run a successful supply chain. One of her secrets: Watson as a […]

Continue reading

IDC: The Future of Supply Chain

What are the challenges and technologies shaping the future of supply chain? We’re living in what some call the age of disruption, where digital business and globalization are disrupting business models and industries and changing the way we live and conduct business. According to IDC, this will translate into 33 percent of all manufacturing companies […]

Continue reading