How is the Need for Data Changing?
It’s becoming clearer and clearer to those of us who work in procurement that data is the future of our field. Procurement must rely on data to move forward into the future, to stay relevant, and to increase the effectiveness and value of what we provide to our organizations.
Data needs to be the backbone of everything that we do. It is evident to those of us in the trenches that it needs to be the basis for building our procurement function and our vendor master.
A survey by LevData found that 97% of senior executives who oversee over $450 billion in annual direct material spending believe that a data-driven procurement process is vital to achieving long-term value, cost reductions, and efficiency gains.
This may come as a surprise to some. After all, they’ve been relying on gut feelings and long-term relationships, and what they’ve been doing for ages seems to be working just fine.
But, the need for data is changing. And it’s changing fast. Those who aren’t on board with this evolving understanding of data’s importance will be left behind.
Procurement is Embracing Big Data
You’ve probably heard the phrase “Big Data”, but you might not be entirely sure what it means. In essence, Big Data refers to massive amounts of complex, and sometimes even disparate, data that comes in quickly and is constantly growing.
Big Data has:
- Volume—there’s a ton of it
- Variety—it includes structured, unstructured, and semi-structured data
- Velocity—it comes in at a rapid pace and is being generated continuously
Big Data is becoming more common in procurement as companies seek ways to lower costs, decrease risk, and increase performance, speed, and quality. The only way to do all of these things effectively is with increased data and the ability to actually make that data into something useable.
Consider all the different types of data that exist within your procurement function and within your company:
- Risk factors
- Market insights
- Total spend
- Diverse spend
- Supplier profiles
- Supplier performance
- Tribal knowledge
Comparing and contrasting various types of data from across systems, both internal and external, makes it possible for procurement teams to recognize trends, connect the dots, and make better decisions. When you collect and monitor all the various types of data from contracts to vendor performance to risk assessments to current market trends, you can make decisions based on evidence instead of tradition, gut feeling, or existing relationships. And you can make better decisions because you’ll have all the information.
Supplier information, market conditions and trends, risk factors, and more change regularly. To ensure a strong supply chain, you need to be aware of these changes as quickly as possible and understand how each change affects other aspects of your company. That’s why you need data. And the amount of information and the speed at which it changes is why you need to have the tools and processes to handle Big Data.
With our machine learning technology, Tealbook can help you ensure that the supplier information side of your data foundation is accurate. Tealbook integrates seamlessly with your other tools and systems to give you a total view of your data. Contact us to learn more about how we can help you harness your data.