Have you ever given much relevance to the letter ‘v’? I know you’re thinking ‘Who starts a blog about something as intricate as data asking such a question? Nobody has a vested interest in an inanimate letter!’
Let me change your mind…
The term ‘big data’ has swiftly become a buzzword, one that has varying definitions. So, it is best to characterise it. Let’s do so with the letter ‘v’!
Big data implies huge volumes of data. Once upon a time, it was individuals that created data. Nowadays, it is generated by machines, networks and systems. This evolution has allowed data to be created in incomprehensible amounts. But how big is big?
Let’s use data to explain data. According to a report by IBM Marketing Cloud “10 Key Marketing Trends for 2017, 90% of the data in the world today has been created in the last two years alone, at 2.5 quintillion bytes of data a day! Take Facebook for example. The social media giant that has more users than China has people sees 2 billion searches a day!
Velocity is the measure of how fast the data is coming in from sources like business processes, machines, networks and human interaction with things like social media sites, mobile devices, etc. Having just looked at volume, you can imagine the tsunami of data that is being considered. To put it into perspective, Facebook users upload more than 900 million photos a day.
As Donal Daly so eloquently describes in his book “Tomorrow Today” 2016, “The rapidity at which things happen in the world makes it hard to keep up. On the Internet, the pace is staggering. In one minute on August 1, 2016, the same day that technology took over the top five places in the stock market, this is what happened in an Internet Minute.”
|Activity||Per Internet Minute|
|Videos viewed on YouTube||7,846,597|
|Photos uploaded to Instagram||44,814|
|Internet Traffic (GB)||2,264,453|
This data growth and social media explosion have changed how we look at the data. The data movement is now almost real time and the update window has reduced to fractions of the seconds. This high velocity data represents Big Data.
Variety refers to the many sources and types of data both structured and unstructured – data diversity! We used to store data from sources like spreadsheets and databases. Nowadays it can be stored in multiple format i.e. excel, csv, access, pdf, html, etc. It is up to each organisation to arrange it and make it meaningful. Which takes me to the next part of this blog…
So, how can ‘Big Data’ help Procurement make a real difference?
Let’s stick with the theme, shall we? The answer is VALUE.
In other words, how does procurement turn big data in the supply chain into consumable big data in the value chain?
I know you’re thinking – can we dive straight in with the big stuff? You’re right, start small to grow big. Collecting, cleansing classifying, learning and enhancing data and build rules and algorithms around it is best done on a small data set. Don’t let the market and big digital brands fool you in to buying in to the big data picture which will require big investment, if you have not validated your rules for insights on the small data. It is your objective to know what you don’t know into knowing what you need to know before you can go in search of valid answers.
However, when you have defined the right questions to ask of small data and you have gotten valid answers, then you can move to a bigger data proposition. With more organisations moving from procurement to e-procurement, the potential for collection, analysis and use of business, meta and machine-generated data is significant. There are various procurement performance areas which can benefit most from understanding & implementing big data such as Spend Analysis, Supplier Management, Trend Analysis and Contract Management.
Procurement functions can take advantage of the data available to predict elements such as spending patterns, supply chain risk and supplier performance with distinct accuracy. This type of insight should be used when designing future business strategies and informing decisions. In terms of marketing spend, for example, big data can enable procurement and marketing to more accurately determine the ROI of any investment.
Suppliers act as the epicentre of success to most leading businesses. The in-depth analysis of complex supplier relationships made possible by big data can lead to significant gains for the company. Big data can also play a part in developing trend analysis to show patterns and forecast the future, which in turn will apprise decision making with an organisation. It will also aid in the transformation of unstructured data found in the likes of documents, contracts, spreadsheets, etc into meaningful and accurate datasets ready to be taken from the supply chain and applied to the value chain.
The real Value in data is that it has huge potential to close that ancient old chasm between buyers and sellers. Data can become the defined pinnacle around which buyers need suppliers for market insights and solutions and suppliers need buyers to fully understand the real business challenges and questions to ask from the data. The augmentation and relational opportunity to appreciate and respect objectives, contexts and pain points for both buyer and seller cannot be underestimated. Data drives the new generation of buyers and sellers, value beyond cost savings.
So for me, the idea is simple – Data drives valuable relationships between buyers (DB) and sellers (DS), or:
DB(v1 + v2 + v3) + DS(v1 + v2 + v3))= V2