Evolution of Spend Analysis and the Rise of Big Data: Part 2
In our previous blog we talked about the growing importance of spend analysis and how it has evolved over the years.
With this blog let us dive in into the fascinating world of Big Data.
Business cannot be done in isolation. It is affected by various factors like economy, technology, social environment, etc. Strategic decision process, especially in very large organizations like multinational and global companies, requires analysis of big data, may be in hundreds of gigabytes or tetra bytes.
Big data can be broadly considered in four major areas such as data relating to procurement spending, performance of suppliers, enterprise contracts and procurement process analysis. Procurement big data will be in the form of cost of forecasting the demand, demand data according to the product, suppliers, regions, industry, government departments, and restricted use as per directives of the controlling authorities, data on the methodology adopted in procurement, bid receipt, bid opening, bid analysis, proposal development, and approval of competent authority, negotiations, and placement of orders.
Appraisal of vendors is carried out before the request for quotation is sent to the potential vendors. Appraisal of the performance of the vendors on criteria of cost, quality, and delivery schedule and after sales service is very important and forms an important component of the big data. The selection of the sources of supply and development of new sources of supply including identification of the strategic supply partners is a global exercise in international and global organizations and occupies a good share of the big data. Enterprise Contract Management (ECM) and the related data has assumed great importance in spend analysis.
Handling of big data is a challenge for any organization in any part of the world as it involves a large number of activities like data collection, storage, search, transfer, sharing, analysis, retrieval and data management (Aberdeen Study). Since there are large number of data sets, processing and managing big data is very complex. The impact of such decisions is very significant and far reaching on the overall profitability of the organization.
McKinsey & Co. published a report in June 2011, according to which simply making big data more easily accessible to relevant stakeholders in time creates tremendous value.
Stay with us as in the next blog we talk about the benefits of big data analysis and how spend analytics can be leveraged for big data.
For further reading, click on the download button below to access the whitepaper “The Evolution of Spend Analysis and the Rise of Big Data”
[Image source: Wikipedia]