The Evolving World of Procurement Analytics
Connectivity and The Internet of Things has totally changed our world. Think for a minute about how connected you are. Your smartphone provides detailed directions to your destination … and tracks your movements. You easily complete complicated orders over the internet … and your buying history is cataloged. You browse for information on a topic … and ads for related things and more appear on your social media feed.
Today, there are over one trillion connected objects and devices with more coming every day and every one of them constantly generates data. Experts estimate that there are more than 2.5 billion gigabytes of data generated every day, of which over 80% is unstructured.
Data is the new basis of competitive advantage and companies that successfully harness this latent power quickly become leaders of the pack.
Today’s Business Climate
Marked by rapidly evolving technologies, today’s ever-changing business climate is littered with confusion. Current IT tools are changing and improving at an amazing rate. Millions of dollars are being invested by corporations to try and harness this technology-based opportunity, but there is a potential that what was best in class today can become quickly stale or obsolete tomorrow.
Uncertain Path to Progress
The pace of change is rapid, causing uncertainty in the path to progress. Today, companies are in the embryonic stages of developing Procurement Analytics capabilities and, to date, only the surface has been scratched in terms of potential analysis and insights. On the Advanced Analytics spectrum, progress is often hindered by separate legacy systems, data availability and data quality issues. In the hands of an accomplished data scientist, all of these problems are easily solved with today’s powerful data tools.
Ever wonder how your favorite big box discounter is able to have just what you need, before you even realized you needed it? The how’d they do that secret is predictive analysis. Predictive analysis unleashes the potential of data locked within company operations and allows for patterns to emerge through the connection of disparate data sources. Traditionally, most analytics have been based on historical data. The new age of Procurement Analytics uses procurement data, combined with forward looking data as well as predictive algorithms to create powerful predictive data and insight.
To power these new tools, a convergence of market intelligence, business forecasts and other corporate, publicly available or social media/news data combines with traditional Procurement/AP and other legacy system data to give a holistic supply chain view and allow much more multi-faceted variable analysis to come into play. Having fully developed, robust models then creates new, surprising opportunities for strategic decisions that impact the bottom line.