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Big Data Analytics in Procurement

The future of the analytics in the modern business practices and use of Big Data for the success of the businesses.

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24 views4 pages

Big Data Analytics in Procurement

The future of the analytics in the modern business practices and use of Big Data for the success of the businesses.

Uploaded by

miltechinsights
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Big Data and Analytics: A Big Advantage

in the Pursuit of Digital Procurement


Transformation

Big data? Big deal.


Procurement organizations generate and store massive amounts of data, which is often
widely dispersed across different systems, operations and geographies. But how can data
help procurement take control of its landscape? How can procurement use data and
make it work to provide the insights that will enable better planning, efficiency
and effectiveness?

Before there was big data, there was just… data. Procurement organizations compiled
mainly internal, structured data from transactions, operations and partners through
laborious processes that could take weeks to complete. Today, sources for data have
expanded to include a much more disparate set of both internal and external, structured
and unstructured data obtained from automated processes executed within hours or,
in many cases, in real time.

Having the data is a good thing – but it’s the procurement organization’s analytical
capabilities that truly change the game, enabling it to unlock the real value of large
amounts of structured and unstructured data and get to the next level of impact on
enterprise-wide performance.
Big Data and Analytics: A Big Advantage in the
Pursuit of Digital Procurement Transformation

Big Success with Big Data


For today’s digitally-enabled procurement teams, data is an asset – a doorway to critical insights
that can drive timely, informed and effective decision-making. Since every area of business
operations generates and consumes data, performance can be improved through analytics. By
processing and analyzing both structured and unstructured data, big-data technology can help
procurement organizations unlock greater insights into their operations and enable improved
decision-making.

A New Data-Driven, Strategically Focused Procurement Organization


Analytics help tie together internal data sources, such as spend data, contract data and data related to
supplier relationship management, with external data sources, such as supplier databases – providing
information anytime and anywhere about supplier markets. Essentially, analytics can help procurement
do things like identify the right suppliers, mitigate supplier risk, identify changing market conditions early,
shorten procurement cycle times, optimize operations, and unlock new revenue opportunities, among
others. Another benefit of analytics is a better understanding of participants and their behavior in the
procurement process.

From Reactive to Proactive


For procurement, big data represents a completely new approach. In the not-so-distant past, procurement
was only able to reactively satisfy the demand triggered by requisitions. Big data allows it to become
proactive by forecasting demand based on identified patterns, thus widening its traditional scope of
action. A further benefit is a more detailed understanding of supplier performance. The results can be
used to weigh strengths and weaknesses and make determinations when designating certain suppliers
for key products. This can be achieved by detailed root-cause analysis based, for example, on data about
ordering, delivery and quality.

Applying Analytics to Procurement


Big-data technology can provide significant benefits to procurement organizations in the following areas:

• Self-service Analytics and Reporting: An approach to data analytics that enables procurement
to develop reports and perform analysis on spend, supplier base, compliance, and other
spend-related data.

• Predictive Analytics: Predictive models typically support planning or predict the most likely
outcomes based on actual conditions. Procurement can forecast spend based on anticipated changes
in the business and pricing based on external factors. Additionally, procurement could also support
the supply chain with network design and optimization.

The information contained in this document has been supplied to you by GEP who are CIPS’ Knowledge Partner for Cloud and Mobile Solutions.
CIPS takes no responsibility for any loss or damage in anyway arising from your interpretation or use of this information. To learn more about GEP,
CLOUD AND MOBILE please visit www.gep.com. For more about SMART by GEP, our cloud-based source-to-pay platform, please visit www.smartbygep.com

SOLUTIONS To find out more about Chartered Institute of Procurement & Supply visit www.cips.org or call +44 (0)1780 756777 or email [email protected]
Easton House, Church Street, Easton on the Hill, Stamford, Lincolnshire, PE9 3NZ.

2
Big Data and Analytics: A Big Advantage in the
Pursuit of Digital Procurement Transformation

• Scorecards: An easy-to-read, real-time graphical snapshot of performance outputs of procurement


based on a set of effectiveness and ef­ficiency metrics. This enables instantaneous, informed
decision-making.

• Risk Analysis: This technique identi­fies business risks to the supplier base – including pricing risk,
compliance risk, geographical risk, disaster risk and others. It also helps de­fine preventive measures
and detect countermeasures to successfully deal with risk scenarios.

• Data Mining: An application that analyzes large amounts of data to identify trends that offer
meaningful insight. Procurement can better understand spending trends, supplier performance trends
and external pricing trends.

• Slice-and-Dice Analysis: An analytical tool that presents data along different dimensions.
Procurement can thus benefi­t from spend information by supplier, geography and category.

Transforming the Procurement Landscape


Big data and analytics can bring about transformative changes in procurement. They will usher in a
new frontier for procurement with the potential to deliver on the promise of business intelligence. A
combination of big data feeds, predictive analytics and reporting frameworks helps deliver greater data
assurance, ultimately helping reduce costs thanks to greater visibility and control.

Also Available:
Procurement Analytics in the Era of Big Data: What CPOs Need to Know
Big data and analytics are driving big change in procurement – in some new and surprising ways.
This GEP-sponsored white paper from The Hackett Group explains how procurement organizations
can use big data and analytics to make better-informed decisions that strengthen business impacts,
yield greater savings and create more value within the enterprise. DOWNLOAD NOW

Learn more about secure cloud procurement solutions at www.smartbygep.com

The information contained in this document has been supplied to you by GEP who are CIPS’ Knowledge Partner for Cloud and Mobile Solutions.
CIPS takes no responsibility for any loss or damage in anyway arising from your interpretation or use of this information. To learn more about GEP,
CLOUD AND MOBILE please visit www.gep.com. For more about SMART by GEP, our cloud-based source-to-pay platform, please visit www.smartbygep.com

SOLUTIONS To find out more about Chartered Institute of Procurement & Supply visit www.cips.org or call +44 (0)1780 756777 or email [email protected]
Easton House, Church Street, Easton on the Hill, Stamford, Lincolnshire, PE9 3NZ.

3
Big Data and Analytics: A Big Advantage in the
Pursuit of Digital Procurement Transformation

RECOMMENDED READING FOR SOURCING AND PROCUREMENT PROFESSIONALS

Procurement Transformation: How Technology Is Driving Change and What to Expect Next
Emerging technologies such as IoT, AI and cloud computing are transforming enterprises and opening
up new possibilities in the procurement function. How do you harness these opportunities to build a
high-performance digital procurement organization? Read this report, which also discusses key tech trends
shaping procurement strategies today and tomorrow. DOWNLOAD NOW

The Internet of Things: Reimagining Procurement in the New Digital Ecosystem


The massive technological advance known as the Internet of Things (IoT) is permanently changing
the relationship between people and machines and creating new opportunities for businesses.
But what exactly is IoT? And what are the anticipated benefits for procurement and supply chain?
This concise, engaging guide from GEP tells you what you need to do now to unlock IoT’s
imminent potential. DOWNLOAD NOW

More on Cloud and Mobile Technology


For more white papers, case studies, webcasts and other resources on cloud and mobile
technologies for procurement professionals, please visit the GEP Knowledge Bank.

To learn more about GEP’s consulting and outsourcing To learn more about cloud and mobile procurement
services please visit www.gep.com software please visit www.smartbygep.com

Access our free knowledge resources at http://www.gep.com/knowledge-bank


100 Walnut Avenue, Clark, NJ 07066 | P 732.382.6565 | [email protected] | www.gep.com
Clark, NJ | Princeton | Toronto | Dublin | London | Prague | Mumbai | Hyderabad | Shanghai | Mexico City | Costa Rica | São Paulo | Singapore | Sydney
Copyright © 2017 GEP. All Rights Reserved.

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