A 2014 Accenture study finds that senior executives are looking to technology to help their enterprises respond to market volatility and improve business outcomes.
The job of procurement used to be relatively straightforward: you source a product or service; negotiate pricing and contracts; review technical specs (if applicable); track deliveries; and forecast demand. Today, with silos disappearing, departments are becoming more functionally agnostic, working in tandem with other departments to derive the best results for the enterprise. And that’s a good thing.
Procurement is becoming a true strategic partner and analytics, made more valuable than ever with the accumulation of Big Data, has played a major role in this transformation. This influx of data can improve procurement’s spend analytics, as well as its contract management, supplier management, and performance management analytics. But first, you have to know what you’re looking for and how to find it. And when you do, the results can be striking
In 2014, research and consulting firm, Accenture published a study on why supply chain leaders are using big data analytics. The study was based on a survey of 1,000 senior executives from major companies. What is clear from the results is that executives are looking to Big Data to improve their business decisions and outcomes, but up to this point, it’s mostly been about expectations rather than actions. Although 97% of the executives surveyed said they understood how Big Data analytics can help their supply chain, only 17% have implemented Big Data in at least one of the supply chain functions. That is changing as well. The study found that 3 out of 10 of those surveyed were planning to implement more robust analytics within the next six to 12 months. And it’s pretty clear why they’re moving in this direction.
The study found that to be most successful; however, it’s necessary to implement a robust Big Data analytics strategy throughout the enterprise rather than just using the analytics for specific and limited processes. Those surveyed, who had instituted an enterprise-wide Big Data analytics strategy, compared quite favorably against those who had implemented only process-focused analytics.
- 61% had shortened order-to-delivery cycle times vs. 14% for process-focused
- 60% had an increase in supply chain efficiency of 10% or more vs. 10% for process-focused
- 55% reported better customer and supplier relationships vs.14% for process-focused
- 52% reported faster and more effective reaction time to supply chain issues vs. 11% for process-focused
- 48% realized greater integration across the supply chain vs.12% of process-focused
Companies that make a commitment to Big Data analytics are realizing substantial benefits that can result in a significant ROI.
See more of the ways Big Data can help your procurement operations in the Accenture study.