Big Data – Revolutionary, or a Truck Full of Young Male Cattle? *

Advances in technology are making it possible to generate more data than ever before. We can quantify, measure and track every interaction, transaction and engagement in excruciating detail. And when we collect these “big data,” we can gain tremendous insights into business processes, including global procurement strategy. Because global procurement is focused entirely around obtaining greater efficiencies and streamlining purchasing operations, global procurement is primed to be revolutionized by the insights that stem from big data”.

I’m beginning to get a bit cynical about big data. It’s been brewing for a time, but an article from Rick Bender, Sales Director, CenterPoint Group on the My Purchasing Centre website, sparked this particular rant. That’s not the fault of his article, which is fine, by the way. Paragraphs like the one above will probably make most of us nod our heads in agreement at first reading.

But then think about it – and you may end up asking some questions around exactly how this “big data” thing is going to help us in this dramatic manner. For example, one large IT solutions firm who are strong advocates for “big data” and are putting a lot of faith in it as their own engine for growth in the procurement sector seem to have been touting the same use cases for two years now. I’m not hearing much that is new.

My take, as an ignorant non-technologist, is that big data really means that exponentially increasing computing power allows us to analyse more stuff more quickly than we could previously. So that also enables us to bring together different sources and types of data and information and process it to achieve some outputs that we could not have had in the past.

But the key questions really are – what exactly does that mean for procurement? What does it really deliver? And surely you then have to actually do something to and with that data – it does not have value just by existing. So it seems to me that unless you can explain that in practical terms, using real examples, it just all comes over a bit theoretical and academic.

Now there are real success stories in terms of computing power changing the world of procurement possibilities.  Talk to Trade Extensions (or one of their competitors in the market informed sourcing / optimisation field) and they will explain that the ability to ask “what if” questions once an initial MIS sourcing exercise has been analysed has been made possible by increasing computing power.

“OK, I have my optimal solution to my complex logistics / production planning / supply chain outsourcing task. But what if I don’t want more than 5 suppliers, rather than the 15 in the optimal solution, and I don’t want more than two to be UK based? What is the best answer under those constraints”?

Asking that question a few years back would have required hours or even days to answer – now it is minutes. We’re not using that example to promote MIS by the way – it is just to show that computing advances can make a real difference to procurement processes and approaches.

But is that an example of big data? It would seem to fit Rick Bender’s comment that “Analytics software can instantaneously and accurately compute more possible combinations of events and items and scenarios than any human brain could, and computers can also thus make the “sweet spot” recommendation that appropriately balances all of these competing factors”.

But Trade Extensions don’t go on about big data, which is perhaps interesting in itself. Anyway, that is the sort of real-life example that I want to see when people talk about “big data”, not just this sort of generalised assertion: “In the end, these big-data insights yield more precise predictions about how to optimize the supply chain—and better predictions yield better decisions”.  You might be correct Rick – but we need to see and hear some real-life examples and stories, we'd suggest.

So solution providers; it’s time to cut the “this has great potential and is going to change the world” bulls**t, and tell us how this is really helping procurement departments and practitioners today. We’ve had the vague promise of a better future for quite long enough now in terms of big data and procurement.

(Just an aside - "global procurement is focused entirely around obtaining greater efficiencies and streamlining purchasing operations" says Rick Bender's article. No, it isn't. It really isn't. But maybe we save that argument for another day).

* Come on, think about it ...

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Voices (5)

  1. Secret Squirrel:

    Agreed, Garry.

    I came to procurement via being a software developer for supply chain and what is touted as big data isn’t. What we can do much better is use existing data better and exploit Moore’s Law to increase our current analysis capability. What I find very hard to believe is that procurement needs Hadoop clusters.

    And please don’t think I was trivialising TradeExtensions. It’s a very neat application of optimisation and from what little I have seen, very user friendly.

  2. Garry Mansell:

    I find myself agreeing with Peter here, and Squirrel makes some good points too.We should be correct in the use of the term “big data”.
    The original scientific meaning of the term “Big Data” is “More Data Than We Can Store”. Examples of such data is streaming data from web cameras. If we can’t store the data itself, we have to do things like process data as streams, compress it, calculate statistics etc, on the fly..
    However, in the business world, “Big Data” has been deflated to mean just “A Lot of Data”. And if we talk about “A Lot of Data”, we can start to do things such as Data Mining, using technologies such as column databases etc.
    A normal sourcing optimization problem, even if involving millions of bids in a highly complex supply chain and zillions of potential combination, is NOT “Big Data”.But, analyzing a set of transactions from a large organization is “a Lot of Data”.

  3. bitter and twisted:

    Big data can be truly revolutionary. By giving us the right answers to the wrong questions with speed and specious precision we will be able to be wronger in a deeper and more delusionary way than ever before.

  4. Dan:

    I think it depends on the procurement activity. Buying widgets may not need Big Data to accomplish. Commissioning social care in a local authority is a different matter, especially when it comes to defining your requirements. Big Data can help you understand the clients in a depth never before achievable – not just their location and age, but how healthy their lifestyles are, their sleeping patterns, how digitally savvy they are. All this can help you commission a service that truly meets their needs.

    Of course, this is a data protection nightmare, but that’s another issue.

  5. Secret Squirrel:

    There is no ‘big data’ in the vast majority of procurement applications. There’s simply not enough transactions to record. I can’t think of a single application that would require a Hadoop cluster or similar. The closest might be an Amazon using it generate orders based on customer transactions but that would have been achievable many years ago using standard supply chain planning tools.

    You can argue that procurement could do with better predictive analytics. But most of that can be done through better application of current supply chain information (and having access to tier n data).

    Even applications like TradeExtensions aren’t much more than a neat use of pretty simple minimisation algorithms.

    So yes, big data is snake oil.

    It however doesn’t absolve us as practitioners. We don’t use existing data to anything like it’s true potential (how much SCOR data does your organisation have and how deep do you measure it?)

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