Is it the buyer’s destiny to be shrouded in data rather than supported by it?

Thoughts from a Procurement Expert

These past few months I have had the opportunity to train buyers and help them develop their purchasing strategies, skills and procurement app proficiency. Such training is essential for the follow-up of their purchasing activities. I must say that sometimes I would have rather not seen some data they shared with me!

It is popular in this day and age to seek mutualisation, improved combination of needs in order to have a consistent and stronger gait towards the supply market. Still, the necessary consolidation of data is extremely problematic for those buyer profiles profile oriented towards negotiation, business management and little agility in “big data” management.

Many factors can explain these difficulties. Firstly, when purchasing is a new function in the company, ultimately detached from “supply chain / procurement”: technical drawings, specifications and volumes forecasts are disseminated in the (too) many information systems of the company. The buyer then expends tremendous time in gathering them and conducting purchasing activities. Secondly, if companies have sufficiently developed their purchasing strategy and methodology but buyers are asked to work as a team, or their data is of uneven quality.

In such situations, consolidation of data creates more issues for the buyer. I saw first-hand in Germany an attempt to consolidate global volumes for regular production parts — overloaded by data, the person was stuck in an Excel file of 800 lines and 250 columns. The energy he invested in data consolidation was lost while it would have been more profitable in launching RFQs, analysing offers and enforcing change.

How can we address this situation and propose to the purchasing managers smart ways to deal with their data?

• Enforce quality data management as an essential skill for 4.0 buyers. The target is within reach: apprehend the flow of data they generate with an adequate scale, they should be able to have “the full picture” of their sourcing projects while at the same time having reliable data and hypotheses, in particular volumes. In my opinion, data gathering should be done by two-person teams: too many buyers do it alone, hence lack self-assessment skills when it comes to defining the adequate data gathering strategy. The best coordination occurs between a buyer and a data analyst: both profiles joining forces would have complementary skills be able to take a lessons learnt card out of this exercise for the next batch of data to be handled.
• Implement robust information systems dedicated to purchasing and ensure regular training of the users. If the COO / CPO requests internal stakeholders and suppliers to perform the activities in the IS, the information ought to be more complete and of even better quality. Still the technologies which are currently available on the market tend to show more and more blatant limits: they are progressively aging and stuck with legacy, unvalued data; they require consequent amounts of manpower to clean data and maintain the systems…
• Trust the new, out-of-the-box artificial intelligence applications. I’m conscious this is a real gamble: doubt arises that there is potential for new apps to emerge and come make purchasing information systems obsolete in the way they are handling large amounts of data at the same time as they all claim to embed artificial intelligence within their core functionalities. I consider that cloud computing, new data visualization widgets and machine learning may well deliver much more productivity and purchasing intelligence than these IS, thus empowering the buyer with a completely new set of tools for “augmented” decision-making.

Get in touch with us to continue the talk and discuss which metrics you would choose to assess how the procurement activity was impacted by big data!