Big Data worries and why eSourcing is playing catch-up

In a recent guest post for Procurement Leaders, James Jenkinson, VP and Head of Digital, talks Big Data and how it is shaking up eSourcing.

Last week the Procurement Leaders World Procurement Congress threw into sharp relief the challenges modern procurement teams face when trying to handle huge volumes of data. As seasoned procurement professionals know, tracking and modelling a global supply chain is an extremely complex task as is the ability to utilize those numerous data streams in one place.

The phrase ‘Big Data’ may be on everyone’s lips, and it was definitely occupying the head space of the CPOs at WPC, but the reality is that most teams are hamstrung by the fact that they are using old systems which create buckets of individual data analysis but lack the capacity to bring everything together in one place.

If, for example, a company puts out an RFP to 10 suppliers and receives back 1000 different price points they could potentially be wrestling with millions of data points. This data could be used for a number of other purposes down the line, but will almost certainly be forgotten about on someone’s laptop when the sourcing process is completed.

Playing catch up

Technology, though, is starting to catch up and that is good news for procurement here. Analytical capabilities are improving while the cloud is making it easier for that information to be shared around the business and the function.

However, while the technology has taken great strides forward, the world continues to move on and for many that means existing eSourcing solutions don’t now make the grade. There are three major reasons for this.

First, the types of analytics needed today are so complex and multi-dimensional with many different award scenarios to understand that it is not simply the technology that is struggling to keep up. There has been a fundamental shift in the key skills needed within a procurement team.

While a category manager may view his or her supplier relationships and therefore people skills as their most important attribute, with such complex analytics now involved in these processes, people need data handling, problem solving as well as analytical skills in order to create the whole picture view needed.

Second, modern procurement executives use a fact-based approach, focussing on clarification and feedback, which requires many iterations and scenario testing to find the best solutions. It has been very difficult for technology to replicate this human overlay.

Finally, procurement practitioners tend to operate in a very structured way, which requires software to be heavily customized in order for it to be used effectively. In most cases this requires significant change management and training activities.

A new way of thinking is needed

New thinking is needed for both the human element and the tools being used to come together to form the perfect partnership. From a technology perspective, the way round the problem of creating an effective solution is to think differently about how those tools are used. How many times have people made the mistake of trying to adapt themselves to the tools they use instead of the opposite?

To view the blog on the Procurement Leaders site, click here.