JUNE 2016CIOAPPLICATIONS.COM8In My OpinionLeveraging Big Data for Efficient Procurement DecisionsBob Murphy, CPO, IBM [NYSE:IBM]Challenges in Deploying Big Data Analytics for ProcurementThe rise of big data is fundamentally transforming the way we do business. It drives new sources of insights, intelligence, efficiency, and experience, expanding the opportunity for procurement to truly become a competitive differentiator and a value-add organization. Although everybody recognizes that data insight is critical, taking the next step and effectively leveraging it is not as straightforward as it sounds. The volume and the quality of data to harness, the complexity in defining the right governance around that data, and the new skill set required for procurement teams to be able to handle and extract value from it are among the three biggest challenges facing organizations.Data Volume and QualityOrganizations, now more than ever, are faced with a plethora of data to interpret; 80 percent of that data is unstructured, generally untapped, and growing in volume exponentially, at an almost un-sustainable pace. The usability of the data in terms of selection, extraction, and storage, as well as quality and relevance are also significant considerations. That said, today cognitive technology is leveraging artificial intelligence and demonstrating ability to ingest data and continuously learn as humans would on an enormous scale. Cognitive technology now brings the capability to analyze all (even unstructured) data, and can understand its meaning, reason, generate hypotheses, arguments and recommendations from which procurement professionals can make more informed decisions. It will provide the capability to automate strategic sourcing tasks, such as RFx creation, analysis, and even scoring, including a level of complexity that can't be handled by humans on the same scale, nor in the same timeframe. In the near future, even market research and negotiations will be improved, sped up, and handled by technology in an even more efficient manner.Fuelled by analytics, procurement can derive insight from disparate sources of information and uncover intelligence for competitive advantageBob Murphy
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