Businesses which neglect to embrace Big Data will be left behind in the fast-moving world of procurement technology, warns Swiss-based procurement specialist, Oliver Engelbrecht.
In a world where hundreds of social apps and platforms are being developed on a daily basis, while billions of people are sharing copious amounts of information every millisecond, rapid growth of Big Data comes like a natural, inevitable part of life, the one that companies harvest carefully in their procurement processes in order to grow their business and gain a competitive edge.
What is Big Data?
Big data is a term that describes the combination of structured (e.g. DBMS), semi-structured (e.g. XML files), or unstructured (e.g. audios/videos/images) data collected by businesses or organisations, as well as its exploitation. It can be used in a raw form, but most often it is utilised through various types of advanced technology, such as machine learning, predictive modelling, data mining, data management and others.
Big Data can be acquired from various environments, such as transaction systems, clickstream logs, downloaded applications, social networks, customer databases, machine-generated data etc. According to the research, around 2 trillion gigabytes of new data is being created every day.
Companies and organisations are using Big Data to learn more about the needs, habits and aspirations of their clients/customers/competition. The more they know, the easier they can improve services and become more competitive. It’s fair to say that every company/organisation is using its supply chain data in a different way, depending on the industry. But all of them strive to use it in the most efficient way. The only difference is how their increasing data is processed and stored, and what new-age tools they are using.
The importance of Big Data in procurement?
Proper management of Big Data can have a significant impact on the growth of each business or organisation. Most often, it is used to maximise assets, unlock strategic values, improve operations, provide better customer service and personalise promotions, while the ultimate goal is to increase profitability.
Big Data has a substantial impact in transforming supply chains and improving decision making. By combining historical data, real-time intel, and customer analysis, procurement uses Big Data in order to achieve better agility, sourcing and process efficiency.
Other important benefits of exploiting Data in procurement include:
- Predicting entry scenarios
- Providing more mature market analysis
- Improving purchasing strategy
- Better supplier universe transparency
- Wider access to commercial information
- Optimised supplier- and resource risk management
- Optimised master data
- Optimising performance
- Client/customer satisfaction
Besides the complexion of processes, their capacity, cost issues and timelines, designing big data architecture is a major challenge for many companies. That’s why outsourcing data service and working with data specialists presents itself as a valid option. The advantages are apparent, especially with specialists available in the market (like Titan).
Key challenges are data feed provider integration, making data available at the right time, data curation, data cleansing and enhancement, data lifecycle management and monitoring, speed in data processing, connectivity and up-/down streams between operating systems (such as enterprise resource planning, source to contract and corporate risk management tools).
Big Data and the impact are already huge, but it will continue to grow at a rapid pace. By aligning with technology, business actions will become more predictable and discoverable in the future. Procurement processes that do not embrace Big Data will have a hard time remaining competitive.
By Oliver Engelbrecht, Procurement Executive, CEO, Co-Founder, Tidal Solutions