Your Best Ally For A Big Data Budget
26 Oct 2015 Marcel 0
Big data is a big deal in business. But, at least according to consultants, vendors and more than a few CPOs, procurement has been slow to take advantage of the potential that big data and analytics offer.
There are exceptions, of course. For example, Ryan Plourde, senior director of supply chain for Newport Mining, leads a company-wide effort to identify total cost of ownership and the lifecycle of mining equipment by leveraging big data. But some other procurement professionals struggle with identifying the sources of big data. Others may lack the skills to manipulate the data when they do identify it. And for a few, getting the appropriate budget for a big-data initiative may be difficult.
For that latter group, though, there is hope. Under pressure to provide better information on their businesses, CFOs are beginning to latch onto the possibilities that big data and analytics offer for their own financial reporting. A survey by Ernst & Young found that 90% of the 500 responding CFOs and others with financial titles expect to be reporting on forecasting, sustainability, and corporate social responsibility within three years. That effort will take some investment, and CPOs can perhaps make a case that with their management of the supply chain they can help, if they have the resources.
For example, CFOs are concerned about supply chain risk. One CFO of a major property-insurance company has recommended that financial executives gather data on a range of risk factors, including supplier quality, infrastructure, and regional risks, among other things, and use analytical tools to compare and contrast different regions where suppliers may be located. That’s definitely up procurement’s alley. CPOs certainly could lead that very important big-data and analytics effort–if given the tools and staff to do so.
Actually, big data can lead to collaboration not only with CFOs but to CIOs too. Case in point: Procurement as well as other functions at Redwood Logistics has asked the company’s IT analysts to help develop tools to analyze a variety of data to look for patterns that can highlight problems or opportunities.
Consultancy Forrester has said that the predictive analytics enabled by big data can be a business-changer, and that it’s never been easier to do the analytics than now. With all its potential, and with the interest and potential support of CFOs and others in the organization, procurement should jump at the chance to lead the way.
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