The amount of data in the world is exploding. Approximately 90% of the data that exists in the world today was created in the last two years alone. Procurement systems capture a vast amount of data, including sourcing information, weather reports, manufacturing, and delivery data, supplier data, purchasing data, catalogue data, and more.
How can procurement leverage the insights big data can provide, integrate predictive analytics into daily work, and provide prescriptive guidance to buyers in the future?
There are undoubtedly very valuable insights within that data, but the challenge for procurement is to understand and use the data to make better informed decisions. Big data, predictive analytics, and prescriptive guidance can further scale with cognitive computing power to provide better information to enhance situational awareness and speed-to-decision. Ultimately, that will drive superior procurement performance. The resulting business value will improve the way procurement roles and processes are executed, making both more effective and valuable.
Most procurement organizations face three core challenges by working with big data:
Digitizing processes: The first challenge for procurement is to access unstructured data that resides in scanned documents, email inboxes, and spreadsheets. A key to unlocking the data’s potential is to ensure it is stored in a digital format that can be analyzed.
Driving insights from data: The second challenge is to analyze and utilize the digitized data. There are human limitations (skills, time, etc.), as well as technical challenges in finding patterns, processing the information intelligently and accurately, and deriving usable insights. Clients are challenged to figure out how to tap into cognitive capabilities and build them into their processes.
Enabling talent & skills: The third challenge involves changing the culture and mindset to bring the organization to the attitude needed to embrace these disruptive technologies. Big data, predictive analytics, and cognitive computing require new skills and new ways of working, such as self-service analytics.
Opportunities in the future
New technologies, like cognitive computing by IBM Watson, provide new opportunities to predict effectively customer and market demands. Data can be used to provide insights and guide buyers or requesters to create request for information or a contract template based on hundreds, potentially unlimited information analyzed across multiple data bases.
Connecting people and information guided by "intelligent" procurement systems will fundamentally change how companies buy and sell. The combination of new technologies, skilled talents working with intelligent systems might provide the competitive advantage needed to stay ahead of the competitors in the market, but also to fundamentally elevate the importance of procurement to provide and to guide the lines of businesses to drive innovations, to mitigate risks and to secure a sustainable supply chain.