Big data is nothing new – we all have heard about it and have some idea of what it means. But when it comes to utilizing the big data in business, we should first forget the technical stuff and get back to the basics of business.
Big Data is quite often defined by 5Vs. The four of those Vs describe the data itself, but when it comes to utilizing the Big Data, the one that matters is the fifth one: Value. It doesn’t matter what kind the data it is or how fancy tools and technology are, you have to process it, if you cannot get an acceptable profit cost ratio to your investment.
Even though utilizing big data is getting easier all the time, as the technology and skills in this area are developing fast, it still can be considered as a big investment, especially, if you start from scratch. For sure, there is a lot of tempting opportunities and hype around the topic, creating even more pressure to start running right away. But it is good to remember that the lack of good business case is often considered to be the most common reason for failing in Big Data related projects.
For many companies, there is a lot of value still to be captured with the traditional data analytics, as it really doesn’t matter whether it is a big or small data that brings the value. But in case you have already captured the low hanging fruits of your procurement performance by slicing and dicing your internal data, then, you might consider taking a look at the data that is out there. You may find some value by utilizing only external data and getting some interesting insights out of it, but eventually you need to be able to combine your internal and external data to get the access to all the possibilities there is. And again, remember that the process of utilizing the big data is not the value itself, but the payback has to be coming from the improved operations.
Where is the value then in Procurement Big Data? What are the best use cases to target for when starting to utilize Big Data in procurement? I do not have a clear answer to that, yet. I have a lot of ideas and guesses, but I do not want to lead your thoughts with those, yet. I want you to start thinking what are the information related daydreams of the procurement professional that would also bring the needed value at the end? And to make it even more interesting, don’t limit your thoughts to publicly available data, but think what you would like to know, if all the data in the world would be available for you.
We in Sievo have started a Procurement Big Data project together with our project partner Chalmers University of Technology and a big part of that project is to research the business value of different use cases. And, when we find the best ones, we will let you know.