Sponsored Article

Procurement Benchmarking in the Era of Big Data

This sponsored Viewpoint article has been provided by Sievo
The content below does not express the views or opinions of Spend Matters.
Visit https://sievo.com/ to learn more.

Let’s be honest: most benchmark reports promise much but deliver little. They often start with good intentions but focus on high-level best practices or rely on survey questionnaires to gather their data. Benchmarks can take weeks or months to develop, and even then they are often discarded if they can’t give concrete action points to procurement.

At the same time, we live in the era of big data. Perhaps you’ve heard that more data has been created in the last two years than all of the previous human history. As data becomes the oil of the fourth industrial revolution, why wouldn’t we put all this data into action?

The challenge is that many procurement organizations still have an internal view on spend. Too many are still getting to grips with past spend visibility, only using their own taxonomies, supplier information and transactional data. This is a shame, because data offers much more potential.

The really big opportunity is to combine your internal procurement data assets with relevant external data assets to benchmark performance against peer groups based on real data and in real time. This paradigm shift may be difficult to master, but its consequences are nothing less than revolutionary.

It’s natural to be hesitant about mixing internal and external data. The reason why you haven’t seen procurement benchmarks combining different sets of data is because this has historically been very hard to do. Not for the least because each company has had their own data storage, classification and analysis approaches. Today, most data still exists in silos even within most large and forward-looking corporations.

Procurement big data breaks down the silos and has completely changed the way we work at Sievo.

Our big data repository now includes data from more than $700 billion of spend and 500 million transactions, all updated regularly. It’s based both on anonymized data shared by customers and relevant third- party sources. It has allowed us to manage extremely large data sets of interrelated data in an unprecedented time and scale.

Sievo’s big data repository also takes advantage of our leading machine learning data classification methods to provide category and sub-category drill-downs anonymously across customer sets. It is continuously being updated and can be provided as a service to identify actionable opportunities and to benchmark performance against peer-groups. The opportunities are concrete and actionable, as you can drill down into details and track performance over time.

Through our big data repository, we’re able to take advantage of truly data-driven procurement benchmarking. It has the potential to completely change the way spend is managed over the next 20 years. Think of the first Olympic athletes who were able to benchmark their training performance against peers before showing up to the race. Those companies that move fast to tap the potential of internal and external data through big data gain the competitive advantage.

As a Spend Matters subscriber, you can get a teaser of the potential of data-driven procurement benchmarking. You can download fresh Consumer Goods or Manufacturing industry procurement benchmarking reports on our website. But this is just the start. Stay tuned for more exciting news on dynamic benchmarking opportunities, an exciting topic we’ll cover another day.

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.