Big Data: A Big Focus For Procurement Organizations

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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

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