Why is ‘big data’ a big deal?

It is common knowledge that the world has become more digitally complex over the recent years. The advanced nature of digitalisation has increased interconnectivity between people and businesses alike. Defined networks now make up the infrastructure of our technical, social and working environments. As technology grows more and more powerful, its partnership with mathematics has opened the door for ‘big data’.

Big data has been defined as “extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions.” Big data can become a popular and seductive concept for procurement leaders, providing them with beneficial analysis and the answers to many burning questions. Queries around to how to reduce costs, increase competitiveness and heighten profits can all be answered with the help of big data. However, leaders are still apprehensive that a computer can present such answers to crucial decisions. Therefore, in order to get the most out of big data, the users need to be educated and confident about how complex and accurate this data can be.

The ability to apply tailored tools and options allows us to create a much more complex purchasing environment and therefore aiding better outcomes. The collaboration with globalisation and technology also provides businesses with information on specialists markets and cultural differences, aiding supply chain relations. This complex marketplace analysis does not only outline purchasing behaviours but also anticipates the future strategic challenges and potential new opportunities.

In order to successfully evaluate business scenarios, it is recommended that you should focus on planning on how to execute your new procurement strategy. Having the ability to effectively comprehend and focus on complexity has provided procurement with the opportunity to enable cost-effective growth for many businesses. This successful understanding has had outstanding results for many procurement departments, making them able to quickly move into expanding markets, reduce cultural barriers and allowing for a greater overall competitive advantage.

Gaining data surrounding global market intelligence also allows leaders to identify potential procurement hot-spots and enables better decision-making to be carried out. This in-depth thinking can dramatically affect procurement, putting it at the top of its game. The results should show a positive and genuine ROI. In contemporary procurement departments, having the ability to read and analyse these complex data sets is a highly sort after skill. Partner this with the ability to visualise and outline the road ahead will be the biggest advantage for successful future procurement.

Top 5 biggest threats to the world right now

Everyday we are faced with headlines containing the word ‘threat’ or ‘crisis’, but what actually are the biggest threats that today’s world is facing?  

Prior to the World Economic Forum next week, results have been released following a review of the biggest issues that could affect the world over the next 10 years. The same analysis from last year’s survey listed state conflict and water security high up the list of global issues. However this year’s report, carried out by over 750 experts, identified all the significant environmental, geographical, political and economic threats that may worsen in the next decade.
Here is a list of the greatest risks found following the World Economic Forums research: 

1. Unemployment
Although economic issues feature far less prominently, unemployment still remains an important issue. A slow but steady economic growth reduces the likelihood of another financial crisis happening any time soon, but the likelihood of unemployment still remains high.  Consistent joblessness keeps inequality within society and causes a lot of social tension.  Yet again, the opportunity for global prosperity remains out of reach. Vast technological advancements and a slow economic growth also mean that unemployment is set to be a long term issue.

2. Migration

Headlines of the large scale migration crisis reach us on a daily basis, but this issue will expand further over the next 18 months. This involuntary but necessary mass movement of people in the past year is set to continue, overtaking other potential global risks. Records show that over 60 million refugees fled from their homes in the previous 12 months. The government and policy makers have to prioritise this crisis and support those in need.

3. Climate change

Even though migration has the greatest likelihood of persisting, climate change looks to have the greatest overall impact on the world.  The inability to confront the issue of the temperature rising means that climate change has now been classified as a Global Risk. This was outlined before the 2015 Climate Change conference in Paris. However, dealing with the effects of climate change can prove a much more complex task when compared to other issues,

4. State Conflict

The results from the survey also revealed that one of the biggest threats to affect the world in the next 10 years will be from political tensions. Such crises including that in Ukraine, Middle-East, Russia, China are all suffering from strained relations and strategic power struggles. Although these struggles are not directly violence related, these issues can cause global instability in both the present and the future.

5. Oil Prices

Oil prices have dropped to the lowest prices since 2004. This reduction in price has come as a positive shock for the global economy and has helped from consumer spending. The recent results shown that petrol may even become cheaper than bottled water in the UK. However, experts say that the quicker the price reduces the faster it will rebound. These potential higher prices could squeeze consumers and increase global inflation.

Times Are Changing: The Future of Supply Chains

“For time and the world do not stand still. Change is the law of life. Those who only look to the past or the present are certain to miss the future.” – John F. Kennedy

In order to develop a tactical procurement team that will add value to your business, you need to learn to adapt. Procurement has been done in the same way by contingent workforce leaders for years. However, the world of sourcing and contingent workforce management is transforming. Traditional sources dominate in contingent workforce management. While staffing suppliers, agencies and personal networks source most contingent talent today. But that is likely to change quickly.

During the 2000s, a few factors combined to cause additional changes in purchasing. Corporate social responsibility became critical due in part to the Internet, easier access to data, strategic sourcing and partnership working. Collaboration between procurement teams, colleagues and suppliers became more frequent. Professionals began to think deeper than cost and how to add value onto overall enterprise. Not to mention the rapid increase of outsourcing and global sourcing requires much greater levels of service contracting management.

It’s evident technology has affected procurement considerably. There has been progression from a focus on physical supply to much broader questions around value. We see, links between procurements effects inside and outside organisations, which developed from understanding both are important for procurement success. Although the world we work in has become much more complex and unpredictable, the internet provides more than enough assistance, to help us make sense of it.

The key to preparing for changes is anticipation, preparation, and the appropriate adjustments. Procurement is changing, so be prepared with these four ways to get ready.

  1. Share your knowledge: The most transformative objective to achieve will be making every member of the team better at procurement. Team performance will have a direct impact on your organisation’s bottom line. When you build a “procurement mentality” in your staff, you can increase compliance, reduce risk and create more cost savings.
  2. Be strategic: Procurement must move away from the presiding focus on unit cost reduction that is still the primary focus in many organisations. You need to play a wider and more fundamental role in the organisation.
  3. Expand spend visibility: Spend visibility is an important part to all changes in procurement. If you want to control supply effectively, you need to manage spend. Spend is what you pay and supply is what you get. To manage spend you have to see it.
  4. Be prepared to use technology: The speed of technological development is only going to get faster going into the future.. Procurement professionals need to be familiar with technology and know how to use it to manage supply chains and get great business results.

“The Times They Are a-Changin” – Bob Dylan

Is technology the answer to better productivity?

With Britain’s economy and employment levels growing much faster than other countries, productivity remains a key topic for improvement for businesses far and wide.   In a recent statement George Osborne expressed the importance of cracking the UK’s productivity puzzle in order to secure future prosperity.  Research has shown that the global financial crisis has had a negative effect on UK productivity levels. While this crisis is gradually improving, we cannot assume that our productivity levels will too.

Statistics show that even though the French shut down business during the summer holidays, they still produce more than the UK who work all year round.  A 2013 Government study provides additional support for this statement, revealing that French workers are operating at a 27% higher productivity rate per hour than UK workers.  This percentage is even higher when compared against Germany and America too.

However the ongoing investment and advancement in technology offers a promising opportunity for the productivity of the UK workforce. For example, the UK’s manufacturing sector has benefited from such technologies, allowing for them to produce 50% more than in 2009. Technology can be hugely advantageous for businesses and start-ups,  helping to reduce costs, provide access to new markets and enhance customer service. Globalisation has meant that local businesses can now be accessed worldwide, thanks to technology. This digital marketplace opens many doors for businesses, enabling them to sell their products nationally and even internationally.

Although there are a growing amount of success stories of businesses breaking into international markets, this is still not mirrored throughout the UK. Larger businesses think investing in IT and new digital innovations will guarantee them better business, but this is not the case. Businesses need to be more efficient when it comes to optimising these technologies in order to reap the rewards. The mixture of creativity, the right channels and data usage can create future opportunities.

The importance of an effective online presence is also crucial for businesses. However it is shocking to see that less than 30% of UK business have an effective online presence. Cloud-based computer file storage and sharing abilities now allow teams to collaborate across locations, providing much more flexibility. However the majority of businesses and employees understand the importance of the digital marketplace but are merely lacking the skills to take full advantage of these technological advancements.

The Government’s Digital Transformation Plan is the strategy we need to transform productivity. The extra focus on the role of digital technologies will be beneficial for the UK economy and help to drive productivity. If executed effectively the potential rewards for the UK are massive.  Future investments in IT systems and training is essential for the strategy to succeed. A change in behaviour and workplace culture is also needed for productivity to improve. There is no better time than now to implement these changes and get all businesses to embrace the technology at their fingertips.

Cloud is slowly gaining popularity within the financial sector, but many companies have been slow to adopt it…

Cloud is slowly gaining popularity within the financial sector, but many companies have been slow to adopt it and put in place a proper strategy for cloud. Unsurprisingly, the main concerns are over the security of cloud systems.

A survey recently conducted by Cloud Security Alliance revealed that 61 per cent of respondents had a cloud strategy in the formative stages in their company. 47 per cent of those said they had plans to use a combination of in-house IT, public and private cloud. 18 per cent planned to use private clouds. None of those surveyed had plans to primarily use public cloud.

The survey also revealed a link between use of electronic transaction channels and cloud policy. The more an organisations customer base used electronic transaction channels, the less strict the cloud policy in place.

“The results of this report are insightful into understanding how the financial services industry is progressing in terms of cloud adoption and how cloud providers can best serve their interests and needs,” said Jim Reavis, chief executive of the Cloud Security Alliance. “We hope that cloud providers and financial institutions can use this as guidance to help accelerate the adoption of secure cloud services in the financial industry.”

Financial service firms are keen to see more transparency and more control of auditing from their cloud providers, this was desired even more than improved data encryption. The top reason for those moving to the cloud, according to the survey, was flexible infrastructure capacity. This was closely followed by the need for reduced time for provisioning. The top services and uses of cloud amongst those surveyed was CRM, application development and email.

When looking at compliance requirements when moving to the cloud, top of the list was data protection at 75 per cent, corporate governance at 75 per cent and PCI-DSS at 54 per cent.

“The responses overall showed a very active market for cloud services in the financial services sector,” said Chenxi Wang, vice president, cloud security and strategy at CipherCloud, which sponsored the report. “Cloud has made solid in-roads in this industry with many firms looking to harnessing the power of cloud. There’s plenty of room for growth, particularly for providers who can fill the void for the auditing and data protection controls that are at the top of respondents’ cloud wish list.”

The survey also looked at how finance, insurance, security and government decision makers take action within their organisations. From standardising cloud services, to identifying which policies will have most impact, to understanding how best to educate users.

Over 100 professionals were surveyed, with organisations varying in size and from locations across the Americas, EMEA and APAC regions.

While financial organisations have been slower to adopt cloud services, it’s clear that they are catching up and starting to reap the rewards of these new services. If you would like to know more about how cloud can benefit your organisation, financial or otherwise, give us a call or email and we will be happy to discuss the best tailored solutions for your business.

The Procurement Group

Join us...

and 2000+ other CFOs and FDs who are already enjoying our free resources and industry insights.