The language of modern procurement is data
What happens when you take a few thousand procurement people from around the world, add keynotes from General Colin Powell and David Cameron, and fill an exhibit hall with procurement service suppliers? Clearly you get a lot of discussions. Just two weeks ago in Orlando, Florida, in the space of four days at ISM2017, over 1,500 of those conversations took place online via social media. Observations on speeches, invitations to visit booths, a few jokes, and lots of what is best described as conversational noise. So what happens when you analyze the noise from all these procurement professionals? Two big themes emerge: the rise of technology and a growing recognition of the importance of data.
Attend enough procurement conferences and you quickly get tired of hearing the same stories. They usually start with observations on the strategic importance of procurement, the ability to make a dramatic difference to the performance of the business, and then, with gentle probing, quickly descend into the ability to save money. The ISM2017 discussion was refreshing with only small percentage of the online debate referencing savings. No one is questioning that savings are important and an essential part of the sourcing mandate – it’s just not terribly interesting. Those that ventured down this familiar savings route were thwarted by little or no engagement from an attentive online audience.
In contrast, those discussing technology were the centre of audience participation. This wasn’t altogether surprising given the number of technology vendors exhibiting at the conference (even those with large service offerings were putting their technology front and centre) but dig deeper and the reason for this technology excitement emerges. Interestingly it’s not about productivity, efficiency, compliance, or even savings. It’s about the engine that moves all those things: data. Masses of data. The young people coming into the profession alongside seasoned operators are puzzling over the enormous amount of supply management data that continues to accumulate, with questions on how to structure it, mine it, interpret it, visualize it, and use it to support decision making across the business. A recognition that buried in this data are things that really are of strategic value to the business.
While many of us have used (or dabbled) with descriptive analytics providing insights into the past this can be deeply unsatisfying. If you have never analyzed your spend, then a historical look is likely to bring some value. However, unless you do something more creative with this analysis, such value will be short lived and rarely viewed as adding strategic value to the business. It is predictive analytics (understanding the future) and prescriptive analytics (advising on possible outcomes) that has the ISM2017 community excited. And, you can’t get predictive or prescriptive without technology.
If the discussion on social media throughout the conference is an indicator of things to come (there we go with the predictive analytics!) then procurement teams must learn a new language in order to be good at their jobs. Algorithms, machine learning, and computational modelling are replacing yesterday’s prosaic discussions. And where is the procurement profession choosing to learn? Clearly at ISM2017, but also on social media. The 28 to 36 years olds at ISM dominated the discussion, as they work together on trying to understand the big data sets they own. What sorts of insights can be derived, who has interesting technology to pull out the facts and help their businesses steer through a rapidly changing corporate landscape, and who are tomorrow’s data leaders so we don’t get left behind?
ISM2017 provided good evidence that technology in procurement has truly arrived. But more importantly, the reason for its rise is all about the data. The era of the procurement data scientist may not be here just yet but it’s coming faster than any other change in procurement’s history. If you don’t yet know understand the language of the future, it’s time to start learning.
Jonathan Cooper-Bagnall is the Founder and Commercial Director of Meronimi, a Proxima Group company. Meronimi takes big data, applies advanced analytics, and provides clients with intelligence on the world's largest suppliers. Everyday Meronimi’s IntelligenceHub consumes data from more than 150 million local and international websites, all the major social network channels, as well as newswires, television, and radio. They access and filter results in over 180 different languages, and use advanced analytics to understand what is being said about suppliers even in remote corners of the world.